Simplified Interest Model
For Flip loans
FRAKT’s interest rate model is calibrated to manage liquidity risk and optimize utilization. The borrow interest rates come from the Utilization Rate .
is an indicator of the availability of capital in the pool. The interest rate model for Flip loans is used to manage liquidity risk through user incentivizes to support liquidity:
When capital is available: low interest rates to encourage loans.
When capital is scarce: high interest rates to encourage additional deposits.
Base Interest Rate 2%
Utilization Rate (%)
Flat Borrow Rate (%)
Flat Deposit Rate (%)
1
2.1
1.68
5
2.5
2
10
3
2.4
15
3.5
2.8
20
4
3.2
25
4.5
3.6
30
5
4
35
5.5
4.4
40
6
4.8
45
6.5
5.2
50
7
5.6
55
7.5
6
60
8
6.4
65
8.5
6.8
70
9
7.2
75
9.5
7.6
80
10
8
85
10,5
8.4
90
11
8.8
95
11,5
9.2
100
12
9.6
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