# Interest Rate Model

borrowing rate of lending pools

Interest Model | Typicial Assets |
---|---|

Interest Rate Model 1:
Borrowing rate applicable for assets with high market cap. | ETH
USDC |

Interest Rate Model 2:
Borrowing rate applicable for most assets. | VELO
OP
SNX |

Interest Rate Model 3:
Borrowing rate applicable for Stable Pool & LST Pools. | USDC (for sAMM pools)
DOLA
FRAX
USDR
wstETH
and other stable or LST assets |

Borrowing Interest Rate - Appliable for assets with high market cap.
x-axis: utilization, y-axis: borrowing interest rate

Borrowing Rate - Appliable for most assets
x-axis: utilization, y-axis: borrowing interest rate

Specifically, for stable and LST(Liquidity Staking Assets) pools, an interest rate model is introduced that aligns with the characteristics of 1) pegging and 2) a lower farming APY compared to volatile pools. This interest model functions similarly to a fixed borrowing rate mechanism before it hits a utilization threshold.

It's important to note that the 5% fixed borrowing rate in the chart below is not a static figure but rather subject to market conditions and borrowing demand. The parameter will be regularly reviewed and updated under a governance procedure.

Borrowing APY for Stable & LST Pools

Read more about the interest rate model here:

Last modified 7mo ago