Interest Rate Model
All interest rates in Genesis Pool are determined as a function of a metric known as the utilization rate, which is essentially the percentage of that asset borrowed out against that asset supplied.
A high utilization rate indicates that a lot of borrowing has occurred, while a low ratio indicates the opposite.
Interest rate models dynamically adjusts the interest rates of each asset depending on the utilization rate. A high ratio would incur higher interest payments from borrowers, and consequently higher interest payments to suppliers, thereby encouraging suppliers to add more assets to the protocol and ensuring healthy levels of available liquidity.
Genesis Pool currently uses the Jump Rate Model, which is more efficient at incentivizing liquidity at higher utilization rate, as illustrated in the following chart:
- At 0-80% utilization rate, the interest rate goes up in the range from 0% linearly to 16.5%
- At 80-90% utilization rate, the interest rate will be fixed at 16.5%
- At 90-100% utilization rate, the interest rate goes up in the range from 16.5% linearly to 36.5%
- At 0-80% utilization rate, the interest rate goes up in the range from 0% linearly to 10%
- At 80-100% utilization rate, the interest rate goes up in the range from 10% linearly to 50%
- At 0-80% utilization rate, the interest rate goes up in the range from 0% linearly to 7.5%
- At 80-100% utilization rate, the interest rate goes up in the range from 7.5% linearly to 47.5%
- At 0-65% utilization rate, the interest rate goes up in the range from 0% linearly to 3%
- At 65-100% utilization rate, the interest rate goes up in the range from 10% linearly to 90.5%
bLUNA
- At 0-75% utilization rate, the interest rate goes up in the range from 0% linearly to 3%
- At 75-100% utilization rate, the interest rate goes up in the range from 3% linearly to 65.5%
MIR
- At 0-65% utilization rate, the interest rate goes up in the range from 0% linearly to 15%
- At 65-100% utilization rate, the interest rate goes up in the range from 15% linearly to 102.5%
ANC
- At 0-70% utilization rate, the interest rate goes up in the range from 0% linearly to 25%
- At 70-100% utilization rate, the interest rate goes up in the range from 25% linearly to 100%
- At 0-65% utilization rate, the interest rate goes up in the range from 0% linearly to 3%
- At 65-100% utilization rate, the interest rate goes up in the range from 10% linearly to 90.5%
- At 0-60% utilization rate, the interest rate goes up in the range from 0% linearly to 6%
- At 60-100% utilization rate, the interest rate goes up in the range from 25% linearly to 126%
Last modified 11mo ago