Because of the approval of the WIP-08 vote, the distribution rate of WING dropped to 60% of the original rate yesterday, which reduced the same proportion of WING APY, which largely led to a sharp drop in our TVL and borrowing volume. In order to encourage borrowing, and at the same time to avoid being unable to withdraw when the utilization rate is very high, I propose to introduce the Kink point scheme.
When utilization rate is low: encourage borrowing with low interest rates
When utilization rate is high: encourage repayment and more supply with high interest rates
The new interest rate model will have a sudden change at the Kink point. The interest rate model before and after the Kink point uses different formulas. The interest rate growth before the Kink point is relatively slow, and the interest rate growth after the Kink point is very rapid. Set the capital utilization rate to U, the interest rate APR when the capital utilization rate is U is Ru, the Kink point capital utilization rate Uk, the basic APR is R0, the Kink point APR is Rk, and the APR when the capital utilization rate is 100% is R100.