Interest Rate (Jump Rate Model)
Jump Rate Model
Forlend features a dynamic interest rate model. Interest rate on each market is different and is calculated based on the Current Utilization of a given market (how much of the supplied liquidity is borrowed v.s. available). Forlend's interest model follows Compound Protocol's Jump Rate model.
When the
Current Utilizationrate increases, both the borrowing rate and supply rate will increase.When
Current Utilizationis lower thanTarget Utilization(the kink point), the borrowing rate will increase at a lower rate linearly.When
Current Utilizationis overTarget Utilization(the kink point), the borrowing rate will increase at a higher rate linearly.Each "Market" has its own interest rate based on Market Parameters and
Current Utilizationrates.
supplyRate = borrowRate * (1- reserveFactor) * utilizationRate
when currentUtilization <= targetUtilization:
borrowRate = baseRate + utilizationRate * multiplier
when currentUtilization > targetUtilization:
borrowRate = baseRate +utilizationRate * multiplier + (utilizationRate - targetUtilization)*jumpMultiplier
V1 Deployment
👇 Example Interest Rate Chat
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