compoundtutorials
  • Chapter 1: Introduction to Compound
    • 1. What Is Compound?
    • 2. Introducing Comet (Compound V3)
    • 3. What’s Next?
  • Chapter 2: Markets, Utilization & Interest Rates
    • 1. What Is a Market in Comet?
    • 2. Utilization: Balancing Supply & Demand
    • 3. The Kink: A Flexible Threshold
    • 4. Interest Rate Parameters
    • 5. Supply and Borrow Interest Rates vs. Utilization Rate Chart
    • 6. Why This Matters
  • Chapter 3: Hands-On Tutorial (Step by Step)
    • 1. Environment Setup
    • 2. Getting Sepolia ETH and WETH
    • 3. Project Structure
    • 4. Creating the index.js Script
    • 5. Run the Script
    • 6. Next Steps
  • Chapter 4: Repaying, Withdrawing & Managing Your Position
    • 1. Updating index.js
    • 2. Example Usage in Your Main Execution
    • 3. Recap
    • 4. Summary & Best Practices
  • Chapter 5: Using the Compound.js SDK
    • Getting Started
    • Performing Common Actions
  • Chapter 6: Additional Resources
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  1. Chapter 2: Markets, Utilization & Interest Rates

5. Supply and Borrow Interest Rates vs. Utilization Rate Chart

Previous4. Interest Rate ParametersNext6. Why This Matters

Last updated 1 month ago

Chart Breakdown: Supply and Borrow Interest Rates vs. Utilization Rate

  • X-Axis (Utilization Rate):

    • Represents the percentage of the base asset borrowed relative to its total supply (0% to 100%).

  • Y-Axis (Interest Rate):

    • Shows the percentage interest rates for suppliers (blue curve) and borrowers (red curve).

  • Supply Rate Curve (Blue):

    • Gradually increases as the utilization rate rises, reflecting the earnings for supplying assets.

  • Borrow Rate Curve (Red):

    • Rises steadily before 80% utilization and sharply increases after the kink point.

  • Kink Point (80% Utilization):

    • Marked with a dashed line, it indicates the threshold where borrowing costs escalate due to higher utilization risk.

  • Annotation:

    • A note clarifies that collateral assets do not earn or pay interest.