# 📈Interest Rates

Interest rate calculation on the Hundred Finance protocol

Last updated

Interest rate calculation on the Hundred Finance protocol

Last updated

Interest rates are calculated algorithmically based on market demands (yields-providing) and the supply of assets (asset-providing) at every block. Interest rate settings are decided upon at the protocol level. Currently, this is the responsibility of the Hundred Finance team, though with the implementation of HND token governance this will move to being conducted in a decentralized manner by the community.

Calculation

Base rate per year, the minimum borrowing rate.

Multiplier per year, the rate of increase in interest rate with respect to utilization.

Kink, the point in the model in which the interest model follows the jump multiplier.

Jump Multiplier per year, the rate of increase in interest rate with respect to utilization after the "kink".

The interest rate is compounded, each block, and Annual Percentage Rate is calculated as follows:

Contracts and Parameters