> For the complete documentation index, see [llms.txt](https://lenx.gitbook.io/lenx/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://lenx.gitbook.io/lenx/lenx-lend-v1/interest-rate.md). # Interest Rate The Variable Rate Interest Rate is a dynamic model that calculates current interest rates using a linear rate, and then modifies the "kink" based on market conditions over time. This model includes a built-in mechanism to adjust rates as the amount of utilized lending capital changes. When the level of borrowed capital is low, the model decreases the key rate parameters to stimulate borrowing and reduce capital influx, aiming to balance the lending activity. Conversely, when there's a high demand for borrowed capital, the model increases these rate parameters to encourage additional lending and temper borrowing, maintaining equilibrium. The model's responsiveness is governed by two factors: utilization percentage and a predefined time period known as the half-life. For example, with no borrowing activity, the key rate parameters are reduced by 50% at each half-life interval. If borrowing is at full capacity, the parameters will double with each half-life. This implies that interest rates will quickly adapt to shifts in borrowing and lending activity following a straightforward path, and simultaneously, they will recalibrate to align with broader market trends by modifying the gradient of this path over an extended period. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://lenx.gitbook.io/lenx/lenx-lend-v1/interest-rate.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.