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Interest Rates

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Last updated 1 year ago

On Clearpool, interest rates are driven by the market forces of supply and demand. Pool interest rates are dynamic, they follow a curve and fluctuate depending on the proportion of pool liquidity being utilized by the borrower at any given time – the utilization rate.

Pool interest is accrued on every block and automatically added to the balance of liquidity owed by the borrower. All else equal, this increases the borrower’s utilization rate.

The amount and frequency of each repayment is of the borrower’s choosing, so long as the utilization rate stays below a predetermined level set by governance (see for more information).

Clearpool has introduced the system, whereby a number of contributors (aka Oracles) are tasked with providing the parameters that shape the interest rate curve.

For more technical detail on interest rates, please see the IRM Technical Papers below.

Default
CPOOL staking
149KB
2022-06-02_Model_for_Clearpool_interest_rates.pdf
pdf
New IR Model Launched June 2022 (plus other models evaluated)
75KB
IRM Technical Paper.pdf
pdf
Original IR Model & Other Formulas