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.
For more technical detail on interest rates, please see the IRM Technical Papers below.
New IR Model Launched June 2022 (plus other models evaluated)
IRM Technical Paper.pdf
Original IR Model & Other Formulas