Interest Rate Model

The Arkis Protocol employs a sophisticated Interest Rate model tailored to both Base and Profit Sharing Pools. This model is meticulously designed to find the ideal balance between several key elements:

• Supply/Borrow APY: These are the annual percentage yields for lending to and borrowing from the pools, applicable in both Base and Profit Sharing configurations.

• Profit Sharing Percentage: Specifically for Profit Sharing Pools, this component determines the percentage of trading profits shared with lenders.

The primary goal of our Interest Rate model is to dynamically adjust its parameters to maintain an optimal equilibrium between:

• Pool Utilization: Encouraging borrowers to make greater use of Arkis Pools by providing attractive borrowing conditions.

• Total Deposits: Motivating lenders to increase their deposits into the pools, thereby enhancing the total value locked (TVL) within the protocol.

Our dedicated research team is actively exploring various methodologies to refine the detection of optimal interest rates further.