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.