Extra Finance

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.
Interest Rate Model 2: Borrowing rate applicable for most assets.
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: