Interest Rates - Sui

Margin pools use a kinked interest rate model where the borrow rate increases gradually up to an optimal utilization point, then rises sharply to discourage excessive borrowing and maintain liquidity for withdrawals.

Borrow interest formula

The formula for the borrow interest rate (APR) is:

if utilization < optimalUtilization:
    borrowRate = baseRate + utilization × baseSlope
else:
    borrowRate = baseRate + optimalUtilization × baseSlope + (utilization - optimalUtilization) × excessSlope

Where:

Utilization: The ratio of total borrowed assets to total supplied assets
Base Rate: The minimum interest rate when utilization is 0%
Base Slope: The rate of increase in interest below optimal utilization
Optimal Utilization: The target utilization rate (typically 80%)
Excess Slope: The steep rate of increase above optimal utilization

Current parameters

Asset	Base Rate	Base Slope	Optimal Utilization	Excess Slope	Max Utilization
USDC	0%	15%	80%	500%	90%
SUIUSDE	0%	15%	80%	500%	90%
SUI	3%	20%	80%	500%	90%
DEEP	5%	25%	80%	500%	90%
WAL	5%	25%	80%	500%	90%

The Max Utilization rate caps how much of the pool's liquidity can be borrowed, ensuring suppliers can always withdraw a portion of their funds.

Examples

At 50% utilization in the USDC pool (below optimal):

borrowRate = 0% + 50% × 15% = 0% + 7.5% = 7.5% APR

At 80% utilization (at optimal):

borrowRate = 0% + 80% × 15% = 0% + 12% = 12% APR

At 85% utilization (above optimal, below max):

borrowRate = 0% + 80% × 15% + (85% - 80%) × 500% = 0% + 12% + 25% = 37% APR