Lending Calculation

When supplying or borrowing assets, users change the utilization ratio of the pool leading to a change in interest rates. The major consequence is that all loans have a variable rate that will change dynamically during the life of the loan.

Interest Rate Calculations

Interest rates are calculated continuously and interest are compounded based on the current parameters of the protocol.

Fees

• Reserve Factor allocates a portion of the borrow interest to the protocol, while the remaining portion is distributed to the lenders.

• Loan Origination Fee is charged when funds are borrowed.

• Liquidation Fee is charged when a liquidation occurs.

The specific Reserve Factor, Loan Origination Fee and Liquidation Fee will be set by the protocol’s decentralized governance and adjusted over time.