Borrow rate
The interest rate paid by borrowers in a [[lending-market]], typically a function of pool [[utilisation]].
In Aave / Compound-style markets, the borrow rate climbs with utilisation along a kinked curve, and the supply rate is borrow-rate × utilisation × (1 − reserve-factor). Stablecoin borrow rates are a leading indicator of leverage demand — a sustained rise on USDC or USDT typically precedes an APY spike on the supply side.
Related terms
- Supply rateThe interest rate suppliers earn in a pool-based lending market — derived from borrow rate × utilisation.
- UtilisationBorrowed assets / supplied assets in a lending market — drives the supply / borrow rate via a kinked curve.
- Lending marketA pool-based protocol where suppliers earn interest from borrowers, with rates set algorithmically by utilisation.