Rate Model
Pulend uses a utilization-based interest rate model. Rates adjust automatically based on how much of the pool is borrowed.
Utilization Rate
Utilization=Total SuppliedTotal Borrowed
| Utilization | Meaning |
|---|
| 0% | No borrowing activity |
| 50% | Half of supplied assets borrowed |
| 80% | Optimal target utilization |
| 100% | All assets borrowed (no withdrawals) |
Rate Curve
The interest rate follows a kinked curve:
| Range | Behavior |
|---|
| 0% - Optimal | Gradual rate increase |
| Above Optimal | Steep rate increase |
Parameters
| Parameter | Description |
|---|
baseRate | Minimum interest rate |
optimalUtilization | Target utilization (typically 80%) |
rateAtOptimal | Rate at optimal utilization |
scaledPercentage | Multiplier for rates above optimal |
Supply vs Borrow Rate
Supply APY = Borrow Rate × Utilization
Suppliers earn a portion of what borrowers pay, proportional to pool utilization.
Higher utilization means higher returns for suppliers but also higher costs
for borrowers.
