Interest Rate Curve

The interest rate in Own Protocol adjusts dynamically based on pool utilization & is charged on the user's asset exposure. As utilization increases, the interest rate rises in a tiered, piecewise-linear fashion, from a base rate, to a mid-tier rate, and finally to a capped maximum rate. This incentivizes efficient capital usage. Each pool's interest rate curve is defined by its strategy contract, which sets parameters like baseInterestRate, interestRate1, and maxInterestRate. This means different pools can have different interest dynamics depending on their underlying asset and risk profile.

Importantly, multiple pools can share the same strategy contract, enabling standardized rate behavior across similar asset classes or risk structures while keeping the system modular and efficient.