Interest Rates

The protocol charges an interest rate on borrowing which is earned by partly the suppliers and partly by the protocol.

Interest rates are dynamic and based on the utilization ratio. During the time of high utilization, the system gradually starts increasing the interest rate. The system is initially set to target an 80% utilization rate.

The higher the rate, the more there is an incentive for other LPs to deposit the asset and for the borrowers to repay their debt.