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Mitigating liquidity risk through the borrow interest rate model
Pixels.so's interest rate strategy is calibrated to manage liquidity risk and optimize utilization. The borrow interest rates come from the Utilization Ratio,
is an indicator of the availability of capital in the pool. The interest rate model is used to manage liquidity risk through user incentivizes to support liquidity:
- When capital is available: low interest rates to encourage loans.
- When capital is scarce: high interest rates to encourage repayments of loans and additional deposits.
The interest rate strategy contract on-chain will be posted here once deployed
The accrual method