Interest Rate Models

Pixcross offers two primary interest rate models to accommodate different borrower and lender preferences. These models are designed to balance predictability and market responsiveness, giving pool creators the flexibility to tailor lending conditions to their strategic goals.

Fixed-Rate Model

The Fixed-Rate Model applies a constant interest rate over the entire duration of the loan. This model provides borrowers with predictable repayment terms, making it easier to plan and manage obligations regardless of market fluctuations.

Dynamic-Rate Model

The Dynamic-Rate Model adjusts the interest rate in real-time based on the utilization rate of the lending pool. As more capital is borrowed relative to available liquidity, the rate increases, reflecting higher demand. Conversely, when utilization is low, the interest rate decreases. This model allows lending terms to adapt to current market conditions, encouraging optimal capital efficiency.

Each pool creator can select the interest model that aligns with their risk appetite and target user base. A visual representation and the underlying formulas for both models can be found below to provide further clarity on how rates are calculated.