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Getting Started

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Risk Framework

Interest Rates

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Introduction

While we eventually plan to move to a reactive interest rate model that will optimise for utilisation, we start off with a standard kink model. The parameters of our kink model are:

- 1.Base IR (APY when utilisation is 0%)
- 2.Kink IR (APY when utilisation is exactly Kink%)
- 3.Max IR (APY when utilisation is 100%)
- 4.Kink% (Percent utilisation where kink occurs)

The main consideration is maintaining target utilisation (typically at Kink%).

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