Understanding interest rate model and pool configuration
Starting from this section, we will dive into the terminologies in crypto loan; these terms are parameters in crypto loan smart contracts. We will also introduce and explain the formulas for calculating and using these parameters. We will also implement the formulas in the code for the crypto loan smart contracts.
At the end of this section, we will implement the smart contract for pool configuration. Now, let’s dive into the borrowing interest rate and lending interest rate.
The borrowing interest rate and lending interest rate
If you save money or have a loan from a bank, you will find the borrowing interest rate is usually higher than the lending (saving) interest rate. You may also find this characteristic of the crypto loan application when the asset pools have sufficient assets. Now, we will explain the relationship between the borrowing interest rate and lending interest rate, and then you will understand...
