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Interest rate mechanism
mrgnlend’s interest rate mechanism uses a 2-piece piecewise function that is configured per asset. It can be expressed as the following:
r
borrow
=
{
x
o
⋅
p
l
if
x
≤
o
(
x
−
o
1
−
o
)
⋅
(
p
m
−
p
l
)
+
p
l
if
x
>
o
r_{\text{borrow}} = \begin{cases} \frac{x}{o} \cdot pl & \text{if } x \leq o \\ \left(\frac{x-o}{1-o}\right) \cdot (pm - pl) + pl & \text{if } x > o \\ \end{cases}
r
borrow
=
{
o
x
⋅
pl
(
1
−
o
x
−
o
)
⋅
(
p
m
−
pl
)
+
pl
if
x
≤
o
if
x
>
o
where:
x
:
current utilization
o
:
optimal utilization
p
l
:
borrower rate at optimal utilization
p
m
:
maximum borrower rate
\begin{aligned} &\text{where:} \\ & x: \text{current utilization}\\ & o: \text{optimal utilization}\\ & pl: \text{borrower rate at optimal utilization}\\ & pm: \text{maximum borrower rate} \end{aligned}
where:
x
:
current utilization
o
:
optimal utilization
pl
:
borrower rate at optimal utilization
p
m
:
maximum borrower rate
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Last modified
4mo ago
