# Interest Rates Interest charged to borrowers is based on the following components:\ \ **1: Vault Utilization Rate**\ **2: Peg Rate** \ **=**\ **3: Total Interest Rate**\ \ 1: **Vault Utilization Rate**\ Hyperstable uses Morpho's AdaptiveCurve interest rate model at the vault level, which is engineered to maintain the ratio of the borrowed asset (USH) over the supplied asset ([Collateral](/docs/protocol/collateral-types.md)), close to a preselected target. When the (vault specific) Collateral Ratio is above the set target, the interest rate automatically trends towards zero.\ \ 2: **Peg Rate**\ The purpose of the peg based interest rate is to manage supply and demand for USH and keep the stablecoin trading at $1. If USH is trading above $1, the interest rate is lowered. If USH is trading below $1, the interest rate is raised. Just like the vault collateralization Rate, under normal circumstances (when USH trading at or above $1, aka at ''peg''), the peg rate trends towards zero. **3: Total Interest Rate**\ The total interest charged to borrowers is the sum of the above. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://hyperstable.gitbook.io/docs/protocol/interest-rates.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.