Interest Rate Model
Lending & Borrowing interest rates
Lending and Borrowing interest rates are calculated due to Utilisation rate
- rf - risk fee free rate: the rate at which #dev DeFi manages to get from other quasi-risk-free protocols.
Borrowing interest rate model uses the Kick parameter which follows a jump rate model.
Borrowing interest rate model
- Kick: the point in the model where the rate of increase in Borrowing interest rate with respect to Utilization rate is at a higher rate, the value of Kick point is determined at 80%.
- rKick - rate at Kick: value of Borrowing interest rate at Kick.
- Max: maximum value of Borrowing interest rate which is calculated at 100% Utilisation rate
The return to Lenders is determined as: