> For the complete documentation index, see [llms.txt](https://nebula-18.gitbook.io/nebula/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://nebula-18.gitbook.io/nebula/tech-overview/nebula-technology-overview/interest-rate-model/benefits-of-the-model.md).

# Benefits of the Model

#### **Dynamic Adjustments**

* Ensures that supply and demand remain balanced.
* Protects against liquidity shortages or excessive borrowing costs.

#### **Incentivizing Liquidity Providers**

* Higher utilization results in better returns for liquidity providers, encouraging them to deposit more funds.

#### **Supporting Borrowers**

* Variable rates benefit borrowers during periods of low utilization.
* Stable rates offer predictability for borrowers who prioritize consistent costs.