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

• $U_{optimal}$: $U$(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

$$if U<U_{optimal}:R_t=R_0+\frac {U_t} {U_{optimal}} R_{slope1}$$

$$if U ≥ U_{optimal}:R_t=R_0+R_{slope1}+\frac {U_t-U_{optimal}} {1-U_{optimal}} R_{slope2}$$

When $U < U_{optimal}$ ​, the borrow interest rates increase slowly with utilization.

When $U ≥ U_{optimal}$, the borrow interest rates increase sharply to incentivize more deposit and avoid liquidity risk.

Withdraw Fee

To ensure the stability of the liquidity pool during the initial phase of our liquidity mining launch, we have implemented a withdrawal fee. This measure is designed to discourage large withdrawals that could significantly affect the pool's interest rate.

The fee helps to stabilize interest rate fluctuations in the protocol's early stages, particularly when the liquidity pool has not yet reached several million. Large withdrawals can cause considerable shifts in interest rates. Our goal is to foster consistent, long-term liquidity for both the Aptos ecosystem and Aries, rather than to serve as a sustainable source of revenue.

Please refer to the user interface (UI) for the most current version of the fee schedule. We plan to progressively decrease the fees as the liquidity in the pool increases.

Since 2024, the withdraw fee has been set to 0.