Understanding the Interest Rate Model (IRM)🧠

Lista Lending utilizes an advanced interest rate model called AdaptiveCurveIRM, specifically optimized for vault-based lending systems on @BNBCHAIN

Here’s what makes it unique:

🔸 Dynamic Rate Adjustments

- The IRM automatically adjusts borrowing rates based on market utilization—the ratio of borrowed assets to total supplied assets.

- The target is to keep utilization close to 90%, maintaining optimal capital efficiency and market stability.

How Does It Work?

✅ At or Below 90% Utilization

- Borrowing rates remain moderate, striking a balance between lending rewards and borrowing costs.

- Encourages active borrowing and supplying, keeping markets efficient and liquid.

🚨 Above 90% Utilization

- Rates increase sharply as utilization exceeds 90%.

- This rapid rate acceleration discourages excessive borrowing, incentivizes repayment, and incentivizes users to supply.

📉 Below 90% Utilization

- Rates will decrease to a fairly low level to encourage users to borrow more.

⏬ Automatic Curve Mechanism

The model’s curve ensures that when utilization is high, the system reacts quickly; when utilization drops, rates decrease to attract more borrowing.

Stay informed and monitor utilization to optimize your DeFi strategies.

Learn more📖: