Skip to main content

​
How interest rates are set

Every market prices borrowing with an adaptive rate model. It has no fixed rate table; instead it continuously steers each market toward a target utilization of about 90%:
  • Utilization above target → the rate ratchets up, nudging borrowers to repay and lenders to enter.
  • Utilization below target → the rate drifts down, making borrowing more attractive.
Rates therefore reflect real supply and demand in each isolated market, not a protocol-wide average. Interest accrues continuously into borrower debt, block by block.

​
Where a paid dollar of interest goes

​
Every fee in the protocol

Two properties worth underlining:
  • Fees only ever touch interest, never principal. There is no mechanism by which any fee reaches deposited collateral or lent capital.
  • The caps are not policy — they’re code. The 25% and 50% ceilings live in immutable contracts; no admin action can exceed them.
Fee changes are an admin power with public on-chain visibility. What the admin can and cannot change — and the timelock protecting depositors — is documented in Governance & admin powers.