# Interest Rate Model of #dev DeFi

How Lending & Borrowing interest rates are calculated.

Lending and Borrowing interest rates are calculated due to *Utilisation rate.*

Utilisation Rate = Total Borrow / Total Lend

## Borrowing interest rate model

At low Utilisation rate, the Borrowing rate is calculated after below formula:

Borrowing Rate= rf +2 ∗ Utilisation Rate ∗ rf

*rf — risk fee free rate*: the rate at which #dev DeFi manages to get from other quasi-risk-free protocols.

Borrowing interest rate model of #dev DeFi uses the ** Kick** parameter which follows a jump rate model. When the

**reaches a certain ratio, the graph or formula for**

*Utilisation rate***changes, we call that the**

*Borrowing rate***point.**

*Kick*Formula to calculate ** Borrowing rate** changes after

**point:**

*Kick*

Borrowing Interest Rate = (max−rKick)∗ Utilisation Rate / (1−Kick)−(max∗ Kick−rKick)/(1−Kick)

*Kick*: the point in the model where the rate of increase in Borrowing interest rate with respect to Utilization rate is at a higher rate, the value of Kick point is determined at 80%.*rKick - rate at Kick*: value of Borrowing interest rate at Kick.*max*: maximum value of Borrowing interest rate which is calculated at 100% Utilisation rate

*Each asset has different rf, rKick and max parameter.*

## Lending interest rate model

The return to Lenders is determined as:

Lending Interest Rate=Borrowing Interest Rate∗UtilisationRate

# Join us

Website: https://devdefi.finance/#/

Telegram: https://t.me/devdefiofficial

Twitter: https://twitter.com/devDeFi_BSC

# Strategy Guides:

→ #1 Strategy guide: **Make 20% profit from BNB** https://devdefi.medium.com/1-strategy-guide-to-make-profit-from-bnb-using-dev-defi-6057e92ae51d

→ #2 Strategy guide: **Make 15% profit from BUSD** https://devdefi.medium.com/2-strategy-guide-reach-15-apy-on-busd-using-dev-defi-d1776a0a3cb8