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Interest Rate Model
Bend’s interest rate model is calibrated to manage liquidity risk and optimize utilization. The borrow interest rates come from the Utilization Rate
.
is an indicator of the availability of capital in the pool. The interest rate model is used to manage liquidity risk through user incentivizes to support liquidity:
- When capital is available: lower interest rates to encourage loans.
- When capital is scarce: higher interest rates encourage repayments for the loans and additional deposits.
The utilization rate is calculated by liquidity in the pool, not just the principal.
Total Liquidity in the pool includes:
Total Debt: All the debt principal and debt interest should be paid by the borrower.
Available Liquidity: Free principal which can be borrowed.
Utilization Rate = (Total Debt) / (Total Debt + Available Liquidity).
UtilizationRate | BaseRate | Slope1 | Slope2 |
|---|---|---|---|
65% | 15% | 16% | 200% |
Utilization Rate | Borrow Rate | Deposit Rate |
|---|---|---|
1.00% | 15.25% | 0.11% |
5.00% | 16.23% | 0.57% |
10.00% | 17.46% | 1.22% |
15.00% | 18.69% | 1.96% |
20.00% | 19.92% | 2.79% |
25.00% | 21.15% | 3.70% |
30.00% | 22.38% | 4.70% |
35.00% | 23.62% | 5.79% |
40.00% | 24.85% | 6.96% |
45.00% | 26.08% | 8.22% |
50.00% | 27.31% | 9.56% |
55.00% | 28.54% | 10.99% |
60.00% | 29.77% | 12.50% |
65.00% | 31.00% | 14.11% |
70.00% | 59.57% | 29.19% |
75.00% | 88.14% | 46.27% |
80.00% | 116.71% | 65.36% |
85.00% | 145.29% | 86.45% |
90.00% | 173.86% | 109.53% |
95.00% | 202.43% | 134.62% |
100.00% | 231.00% | 161.70% |
UtilizationRate | BaseRate | Slope1 | Slope2 |
|---|---|---|---|
65% | 20% | 16% | 200% |
UtilizationRate | BaseRate | Slope1 | Slope2 |
|---|---|---|---|
45% | 20% | 16% | 200% |
Utilization Rate | Borrow Rate | Deposit Rate |
|---|---|---|
1.00% | 20.36% | 0.14% |
5.00% | 21.78% | 0.76% |
10.00% | 23.56% | 1.65% |
15.00% | 25.33% | 2.66% |
20.00% | 27.11% | 3.80% |
25.00% | 28.89% | 5.06% |
30.00% | 30.67% | 6.44% |
35.00% | 32.44% | 7.95% |
40.00% | 34.22% | 9.58% |
45.00% | 36.00% | 11.34% |
50.00% | 54.18% | 18.96% |
55.00% | 72.36% | 27.86% |
60.00% | 90.55% | 38.03% |
65.00% | 108.73% | 49.47% |
70.00% | 126.91% | 62.19% |
75.00% | 145.09% | 76.17% |
80.00% | 163.27% | 91.43% |
85.00% | 181.45% | 107.96% |
90.00% | 199.64% | 125.77% |
95.00% | 217.82% | 144.85% |
100.00% | 236.00% | 165.20% |
UtilizationRate | BaseRate | Slope1 | Slope2 |
|---|---|---|---|
80% | 20% | 8% | 100% |
Utilization Rate | Borrow Rate | Deposit Rate |
|---|---|---|
1.00% | 20.10% | 0.14% |
5.00% | 20.50% | 0.72% |
10.00% | 21.00% | 1.47% |
15.00% | 21.50% | 2.26% |
20.00% | 22.00% | 3.08% |
25.00% | 22.50% | 3.94% |
30.00% | 23.00% | 4.83% |
35.00% | 23.50% | 5.76% |
40.00% | 24.00% | 6.72% |
45.00% | 24.50% | 7.72% |
50.00% | 25.00% | 8.75% |
55.00% | 25.50% | 9.82% |
60.00% | 26.00% | 10.92% |
65.00% | 26.50% | 12.06% |
70.00% | 27.00% | 13.23% |
75.00% | 27.50% | 14.44% |
80.00% | 28.00% | 15.68% |
85.00% | 53.00% | 31.54% |
90.00% | 78.00% | 49.14% |
95.00% | 103.00% | 68.50% |
100.00% | 128.00% | 89.60% |
UtilizationRate | BaseRate | Slope1 | Slope2 |
|---|---|---|---|
65% | 10% | 8% | 100% |
Utilization Rate | Borrow Rate | Deposit Rate |
|---|---|---|
1.00% | 10.12% | 0.07% |
5.00% | 10.62% | 0.37% |
10.00% | 11.23% | 0.79% |
15.00% | 11.85% | 1.24% |
20.00% | 12.46% | 1.74% |
25.00% | 13.08% | 2.29% |
30.00% | 13.69% | 2.87% |
35.00% | 14.31% | 3.51% |
40.00% | 14.92% | 4.18% |
45.00% | 15.54% | 4.90% |
50.00% | 16.15% | 5.65% |
55.00% | 16.77% | 6.46% |
60.00% | 17.38% | 7.30% |
65.00% | 18.00% | 8.19% |
70.00% | 32.29% | 15.82% |
75.00% | 46.57% | 24.45% |
80.00% | 60.86% | 34.08% |
85.00% | 75.14% | 44.71% |
90.00% | 89.43% | 56.34% |
95.00% | 103.71% | 68.97% |
100.00% | 118.00% | 82.60% |
Last modified 4mo ago