Interest-rate models
An interest-rate model (IRM) calculates an EVK vault's borrow rate as utilization changes. The supply rate follows from borrowing, utilization, fees, and vault accounting. Model choice affects borrower costs, supplier returns, utilization, and available liquidity.
Contract parameters use per-second rate units, while interfaces commonly display annualized values. Verify the required units and conversion before using a displayed percentage in a deployment transaction.
IRM types
The models below are examples rather than an exhaustive list. Check the model address, source, factory, network, deployment inputs, and current interface support before assigning one to a vault.
Linear Kink IRM
A two-slope utilization curve increases linearly to a kink and then more steeply above it. EulerKinkIRMFactory.deploy takes baseRate, slope1, slope2, and kink.
The curve does not adapt automatically. A governed vault can replace its IRM if market conditions or its mandate change; a finalized (ungoverned) vault cannot.
Linear Kinky IRM
This model uses a nonlinear post-kink shape. Factory inputs include baseRate, slope, shape, kink, and cutoff. Test how the shape and cutoff affect rates across the full utilization range.
Adaptive Curve IRM
An adaptive model changes its rate over time in response to utilization relative to a target. This can reduce the need for manual updates, while making the current rate dependent on past utilization. Verify the exact preset or deployment and its configured bounds.
Fixed Cyclical Binary IRM
This model alternates between primaryRate and secondaryRate according to primaryDuration, secondaryDuration, and startTimestamp. Borrow costs change with time even when utilization is unchanged.
Deploy and assign in the Toolbox
Market → Configuration → Interest-rate model lists the models this browser deployed and each vault's current model. Add IRM:
| Family | You set | Preview |
|---|---|---|
| Kink | Base APY, kink APY, max APY, kink utilization | Rate curve |
| Kinky | Base APY, kink APY, cutoff APY, kink utilization, shape | Rate curve |
| Adaptive | Target utilization, starting APR, min and max APR, curve steepness, adjustment speed | Rate curve at start |
| Fixed cyclical | Fixed rate and period, repayment rate and window | Schedule over time |
Enter yearly percentages. The Toolbox converts them to the contract's per-second units and previews them before deploying. Pick the vaults under Apply to. Deployment goes through Euler's factory (wallet or Safe). The model is read back and checked, then the assignment is staged as an ordinary change (Change settings).
Tools → Interest-rate models deploys a model before a market exists. Assign it from a market's Configuration later.
Review before assignment
Before assigning or replacing an IRM:
- verify its address, source version, network, and factory;
- inspect the raw parameters and derive representative displayed rates;
- simulate zero, target or kink, stressed, and near-full utilization;
- assess the effect on borrowing, withdrawals, refinancing, and liquidations;
- identify who can replace the vault's IRM and whether changes are delayed; and
- monitor unexpected rates and utilization after deployment.
A recognized factory helps identify how a model was deployed. The chosen parameters and resulting rate curve still need to be evaluated for the vault.