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Liquidity Pool
marginfi's liquidity pool is a shared collateral, borrow-lend pool between all margin accounts. Any margin account can access liquidity in the pool according to their available margin.

## Mechanics

Lending and borrowing happen implicitly in marginfi. This allows for a better trading experience and more efficient usage of liquidity.
Any given margin account either acts as a lender or a borrower in the pool. Whenever a margin account has positive balance, that is available in the pool to be used by margin accounts that require more collateral than their account balance.

### Interest Rates

Lenders are incentivized to provide collateral by earning interest paid by borrowers for their collateral.
Interest rates are compounded hourly.
• u - utilization ratio
• c - scaling factor
$i = -ln(1- u) \cdot c$
With the current mainnet-beta configuration (c = 0.2), our interest rate curve looks like this.
marginfi liquidity pool interest rate curve

## Solvency

The pool is protected with the liquidation mechanism and the insurance fund to ensure marginfi can honor its obligations.

## Limitations

Borrowed liquidity can't be withdrawn from your margin account.