INIT Capital
  • Protocol Overview
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    • Health Factor
      • Blast Parameters
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    • Minimal Liquidation
    • Interest Rate Model
    • Flash Borrow
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  • Key Features
    • Flash Borrow
    • Multi-Silo Positions
    • LP Tokens as Collateral
    • Yield-Bearing Tokens as Collateral
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  1. Borrowing

Interest Rate Model

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Last updated 1 year ago

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INIT employs the double-slope interest rate model (IRM) where the borrow interest linearly and slowly increases until utilization reaches the optimal utilization set by INIT.

The borrowing interest rate will spike if the utilization is greater than the optimal utilization rate.

The borrowing interest rate is calculated as:

rb=a0∗U+a1∗max⁡(U−Uo,0)r_b=a_0*U+a_1*\max(U-U_o,0)rb​=a0​∗U+a1​∗max(U−Uo​,0)

Where:

  • rbr_brb​= Borrowing Interest Rate

  • UUU= Utilization Rate

  • UoU_oUo​= Optimal Utilization

  • Where a0<a1a_0<a_1a0​<a1​

Note: The optimal utilization rate and slope may be adjusted according to the market conditions.

The interest rate curves for each asset are shown below:

WETH

WBTC

WMNT

USDC

USDT

mETH