Interest Rate Model

Moar Market uses a utilization-based interest rate model to dynamically determine borrowing costs and lending yields. This model ensures:

  • ๐Ÿ’ก Low borrowing cost when liquidity is abundant

  • ๐Ÿ“ˆ Rising interest rates as utilization increases

  • ๐Ÿ” Strong yield incentives for lenders when liquidity is tight


๐Ÿ”น Piecewise Linear Borrow Curve

Moar's model is defined by a curve made up of multiple linear segments separated by kink points. Each kink marks a change in slope โ€” the rate at which borrowing cost increases with utilisation.

Example (3-segment curve with 2 kinks):

Utilisation (%)
Borrow APR (%)
Notes

0

3.5

Base rate

75

18.0

๐Ÿ“Œ Kink 1 โ€“ moderate slope

90

32.0

๐Ÿ“Œ Kink 2 โ€“ steep slope

100

50.0

Max rate at full utilisation

๐Ÿ“˜ These numbers are examples and can be updated by governance.

The more the pool is utilised, the higher the borrow APR โ€” encouraging borrowers to repay and attracting more lenders.


๐Ÿ“Š Interest Rate Curve

This chart visualizes the borrow APR across the full 0โ€“100% utilisation range, showing how lender returns increase with utilisation.


๐Ÿงฎ Supply Rate: How Lenders Earn

Lenders earn a share of interest paid by borrowers. The actual supply APR depends on:

  • Current utilisation

  • The borrow APR (from the curve)

  • The protocolโ€™s fee_on_interest setting

Formula

supplyAPR = borrowAPR ร— utilisation ร— (1 โ€“ fee_on_interest)

Where:

  • borrowAPR comes from the current point on the curve

  • utilisation = borrowed / supplied

  • fee_on_interest is the protocolโ€™s share of interest (e.g. 10%)

Example

If:

  • utilisation = 85%

  • borrowAPR = 27.33%

  • fee_on_interest = 10%

Then:

supplyAPR = 27.33% ร— 0.85 ร— 0.90 โ‰ˆ 20.9%

โœ… Key Takeaways

  • Borrow APR is based on a kinked utilisation curve

  • Supply APR depends on utilisation and protocol fee

  • All rates adjust automatically every block

  • Lenders earn more when pools are heavily borrowed

Moarโ€™s design creates natural feedback loops between borrowing cost, pool usage, and lender rewards โ€” keeping the system efficient and fair.

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