# Borrowing rates

The pre-kink multiplier of a pool is $M_{x}$ and post-kink is $M_{y}$. Additionally included (but set at 0 for all pools initially) is a fixed flat interest rate $F$ is managed through governance. Borrower’s interest rates are calculated using this formula:

$BorrowRate_{a} =\begin{cases}F + Pool_{a}Util* M_{x}\, if \,Pool Util \leq Util_{optimal}\\F + Pool_{a}Util* M_{y}\, if \,Pool Util > Util_{optimal}\end{cases}$

$Util_{optimal}$is set at 80% to begin in both stable coin pools as well as variable asset value tokens.

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