# Interest Rate Curve

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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.\
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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.\
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