DeFi lending protocol OpenLeverage has initiated a proposal to adjust its interest rate model, aiming to make the maximum rate more sensitive to the market changes depending on the funds' utilization rate.
OpenLeverage, a decentralized finance (DeFi) lending agreement, has introduced an interest rate model adjustment proposal. The proposal highlights that the current model, which raises the maximum rate by an annual rate of 20%, is insufficient to keep up with market fluctuations. As a result, the new model seeks to adjust the maximum rate in a more responsive manner according to the funds' utilization rate.
Under the proposed model, when the utilization rate of each fund pool reaches the critical value, the maximum borrowing rate will increase by 20% every 12 hours. This process will continue until it reaches the maximum limit of 2000%. On the other hand, when the utilization rate falls below the critical value, the maximum rate will be reduced by 30% every 12 hours until it reaches a predefined minimum.
This adjustment proposal aims to better align the interest rate model with market conditions, offering a more dynamic response to variations in the utilization rate of funds.