RateModel

The RateModel contract computes the borrow rate per second for a given pool utilization. It is called by every LendingPool during update_state() to determine how much interest has accrued since the last update. Testnet address: CCJAUPCU6EIFQK6GTAAYLW3Y4YETJAAUPAGBPFGQ2OUJPSW3WWHUCL2Z

Functions

get_utilisation_ratio

fn get_utilisation_ratio(
    env: Env,
    liquidity_wad: U256,
    borrows_wad: U256,
) -> U256

Returns the pool’s current utilization ratio in WAD format.

util = borrows_wad / (liquidity_wad + borrows_wad)

Parameters:

Parameter	Type	Description
`liquidity_wad`	`U256`	Pool’s available liquidity in WAD
`borrows_wad`	`U256`	Total outstanding borrows in WAD

Returns: Utilization in WAD (0 = 0%, 10¹⁸ = 100%) Edge case: If both liquidity_wad and borrows_wad are zero, returns 0 (empty pool, 0% utilization).

get_borrow_rate_per_sec

fn get_borrow_rate_per_sec(
    env: Env,
    liquidity_wad: U256,
    borrows_wad: U256,
) -> U256

Returns the per-second borrow rate in WAD format. Formula:

util = borrows / (liquidity + borrows)

rate_per_sec = c3 × (util×c1 + util^32×c1 + util^64×c2) / SECS_PER_YEAR

Coefficient	WAD Value	Decimal
`c1`	`10^17`	0.1
`c2`	`3 × 10^17`	0.3
`c3`	`35 × 10^17`	3.5

Returns: Borrow rate per ledger second in WAD. Multiply by SECS_PER_YEAR to get the annual rate.

Rate Curve Behavior

The polynomial curve produces the following behavior:

Utilization	Approximate Annual Rate
0%	~0%
20%	~7%
50%	~18%
70%	~35%
80%	~60%
90%	~150%
95%	~300%+

The util^32 and util^64 terms are nearly zero at low utilization but dominate at high utilization, creating a sharp increase in rates as the pool approaches full capacity. This is intentional — high rates at high utilization attract new deposits and incentivize repayments.

Exponentiation

The util^32 and util^64 terms are computed via rpow_wad(util, n), which uses repeated squaring (exponentiation by squaring) in WAD arithmetic:

rpow_wad(x, 0) = WAD   (= 1.0)
rpow_wad(x, n) = x × rpow_wad(x, n-1)  [iterative, via squaring]

This preserves WAD scale at each step.

Constants

Constant	Value
`WAD_U128`	`10^18`
`C1`	`10^17` (= 0.1)
`C2`	`3 × 10^17` (= 0.3)
`C3`	`35 × 10^17` (= 3.5)
`SECS_PER_YEAR`	`31,556,952 × 10^18`

Error Codes

enum RateModelError {
    InterestRateNotInitialized,
}

Calling Pattern

LendingPools call the RateModel on every update_state():

// Inside LendingPool.update_state():
let liquidity = get_total_liquidity_in_pool(env);
let borrows   = get_borrows_wad(env);
let rate_per_sec = rate_model_client.get_borrow_rate_per_sec(liquidity, borrows);

let elapsed = now - last_updated;
let rate_factor = elapsed × rate_per_sec;   // in WAD
let interest = mul_wad_down(borrows, rate_factor);
borrows_wad += interest;
last_updated = now;

Math Reference — full formula derivation
Lending Pools — update_state() integration
Interest Rate Model — user-facing explanation of the curve shape

Introduction

Contract Reference

TypeScript SDK

Integration Guides

Functions

get_utilisation_ratio

get_borrow_rate_per_sec

Rate Curve Behavior

Exponentiation

Constants

Error Codes

Calling Pattern

​Functions

​get_utilisation_ratio

​get_borrow_rate_per_sec

​Rate Curve Behavior

​Exponentiation

​Constants

​Error Codes

​Calling Pattern

​Related

Functions

get_utilisation_ratio

get_borrow_rate_per_sec

Rate Curve Behavior

Exponentiation

Constants

Error Codes

Calling Pattern

Related