Interest Rate Model
Last updated
Last updated
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:
Where:
= Borrowing Interest Rate
= Utilization Rate
= Optimal Utilization
Where
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: