Interest Rate Model

Rationale

Bend’s interest rate model is calibrated to manage liquidity risk and optimize utilization. The borrow interest rates come from the Utilization Rate
$U$
.
$U$
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.
You can read the technical details about the interest rate model here.

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%