Supply rate
lending APYdeposit rate
The interest rate suppliers earn in a pool-based lending market — derived from borrow rate × utilisation.
Supply rate = borrow rate × utilisation × (1 − reserve factor). The reserve factor (typically 10-25%) goes to the protocol treasury or insurance fund. Supply rate sits below borrow rate by definition, with the spread compensating for unutilised capital and reserve set-aside.
Related terms
- Borrow rateThe interest rate paid by borrowers in a [[lending-market]], typically a function of pool [[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.