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Interest Rates
How interest rates are calculated
We use an interest rate formula similar to alternative lending protocols. The formula has the following configurable variables:
  • Base borrow rate: minimum interest rate paid by lenders
  • Optimal utilization rate: utilization rate where curve switches from slope1 to slope2
  • Slope1: rate of increase in APY between utilization rate of 0 and optimal utilization rate
  • Slope2: rate of increase in APY between optimal utilization rate and 100% utilization
  • Reserve factor: share of interest payments reserved for protocol insurance
  • XTK fee factor: share of interest payment reserved for XTK token holders
Current configuration:
Variable
Value
Base borrow rate
2%
Optimal utilization rate
80%
Slope1
12
Slope2
95
Reserve factor
10%
XTK fee factor
10%
Last modified 1d ago
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