Interest Rate Model

Introduction

To optimize asset utilization effectively, JustLend DAO offers variable interest rates for markets through two distinct interest models: the Whitepaper Rate Model and the Jump Rate Model. To set up these interest rate models, two contracts are utilized: the WhitePaperInterestRateModel and the JumpRateModelV2.

The WhitePaperInterestRateModel is a simple interest rate model where the borrowing rate is directly tied to the utilization rate. In contrast, the JumpRateModelV2 operates differently, as the interest rate jumps to a higher tier when the utilization rate surpasses a certain threshold.