# Market Parameters

### Interest Rate Market Parameters

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<table><thead><tr><th width="254">Parameters</th><th>Details</th></tr></thead><tbody><tr><td>Loan to Value (LTV ratio)</td><td>Loan-to-value (LTV) is the ratio describing how much you can borrow against your collateral.</td></tr><tr><td>Close Factor</td><td>The percent, ranging from 0% to 100%, of a liquidatable account’s borrow that can be repaid in a single liquidate transaction. A liquidator may close up to a certain fixed percentage (i.e. close factor) of any individual outstanding borrow of the underwater account.</td></tr><tr><td>Liquidation Incentive</td><td>The additional collateral given to liquidators as an incentive to perform liquidation of underwater accounts. </td></tr><tr><td>Max Borrow APY</td><td>Maximum possible borrow APY</td></tr><tr><td>Target Borrow APY</td><td>Borrow APY when Current Utilization is equal to Target Utilization</td></tr><tr><td>Traget Utilization (Kink Point)</td><td>When utilization goes above the target utilization, interest rates are more sensitive to changes in utilization.</td></tr><tr><td>Current Utilization</td><td>CurrentUtilization = totalBorrows / (totalCash + totalBorrows - total Reserves) <br>Current Utilization determines the interest rate of each market.</td></tr><tr><td>Reserves </td><td>Reserves are an accounting entry in each pToken contract that represents a portion of historical interest set aside which can be withdrawn or transferred through the protocol’s governance. </td></tr><tr><td>Reserve Factor</td><td>The reserve factor defines the portion of borrower interest that is converted into Reserves. </td></tr><tr><td>pFRA minted </td><td>see <a data-mention href="ptoken">ptoken</a></td></tr><tr><td>Exchange Rate</td><td>see <a data-mention href="ptoken">ptoken</a></td></tr></tbody></table>