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  1. Protocol

Interest Rates

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Last updated 17 hours ago

Interest charged to borrowers is based on the following components: 1: Vault Utilization Rate 2: Peg Rate 3: Debt Cap Rate = 4: 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 (), 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: Debt Cap Rate To manage the overall composition of USH's backing collateral, a % cap is set per collateral vault based on total USH debt. When the debt of a vault is above the set %, interest rates for that specific vault goes up. When a vaults debt is at the intended % of total debt, the interest rates trend towards zero.

4: Total Interest Rate The total interest charged to borrowers is the sum of the above.

Collateral