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Interest Rate Curve

Aries Lend utilizes Aave’ s interest rate model which is calibrated to manage liquidity risk and optimise utilisation. The rate is automatically determined by the utilisation of the protocol.
Interest Rate Parameters
​UoptimalU_{optimal}Uoptimal​
: UUU
(Utlisation Rate) is an indicator of the availability of capital within the pool. The optimal utilisation rate U optimal split the interest rate curve into two parts to manage liquidity risk in the pool.
Base Variable Borrow Rate
Variable Rate Slope 1
Variable Rate Slope 2
Interest Rate Model
ifU<Uoptimal:Rt=R0+UtUoptimalRslope1if U<U_{optimal}:R_t=R_0+\frac {U_t} {U_{optimal}} R_{slope1}ifU<Uoptimal​:Rt​=R0​+Uoptimal​Ut​​Rslope1​
ifU≥Uoptimal:Rt=R0+Rslope1+Ut−Uoptimal1−UoptimalRslope2if U ≥ U_{optimal}:R_t=R_0+R_{slope1}+\frac {U_t-U_{optimal}} {1-U_{optimal}} R_{slope2}ifU≥Uoptimal​:Rt​=R0​+Rslope1​+1−Uoptimal​Ut​−Uoptimal​​Rslope2​
When U<UoptimalU < U_{optimal}U<Uoptimal​
 ​, the borrow interest rates increase slowly with utilization.
When U≥UoptimalU ≥ U_{optimal}U≥Uoptimal​
, the borrow interest rates increase sharply to incentivize more deposit and avoid liquidity risk.
​

Liquidation

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Last modified 1yr ago