dAMM Finance
  • Introduction
    • Abstract
    • The Space
    • The Issues
  • The dAMM Protocol
    • What is dAMM?
    • Understanding dAMM Pools
    • Supply APY
    • Token Borrowers
  • dAMM Token
    • dAMM Utility
    • bdAMM
    • Boosted Pools
    • Governance
  • Interest Rate Model
    • Utilization Rate
    • Borrowing rates
    • Supplier Rates
  • Conclusion
    • Roadmap
    • Future Goals of the Protocol
    • Summary
    • Contract Addresses
  • Security Audit:
    • Dedaub Security Audit of dAMM Finance
  • References
    • [1] Market Making Proposal 1
    • [2] Market Making Proposal 2
    • [3] Notable Recent Exploit
    • [4] Impermanent Loss in Uniswap V3
    • [5] How Liquidity Provider (LP) Tokens Work
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  1. Interest Rate Model

Borrowing rates

PreviousUtilization RateNextSupplier Rates

Last updated 2 years ago

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

BorrowRatea={F+PoolaUtil∗Mx if PoolUtil≤UtiloptimalF+PoolaUtil∗My if PoolUtil>Utiloptimal 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} BorrowRatea​={F+Poola​Util∗Mx​ifPoolUtil≤Utiloptimal​F+Poola​Util∗My​ifPoolUtil>Utiloptimal​​

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

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