DeFiner will be releasing 4 new features next week which includes :

• Interest Rate Model Optimization 
• A Collateral Switch 
• 48 Hour Time Lock 
• FIN Mining Update 

The first three features will be released on Sunday, 29 August at 00:00 UTC. In this article, we will be diving into each feature. 

Interest Rate Model Optimization

In order to better manage liquidity risk and optimize capital utilization, the DeFiner community has proposed to optimize the interest rate model from a current linear model to a non-linear model.

In this way, the borrow APR and corresponding deposit ARP will increase exponentially when the utilization rate of the capital is above 90%. It is designed for the borrowers to have a sense of urgency to pay back loans and lenders have more incentives to deposit in order to add more liquidity.

Current Interest Rate Model:

Definitions:

• U is the capital utilization rate of a certain token, 0<=U<=1
• Compound Supply Rate: the real-time supply rate on the money market
• Compound Borrow Rate: the real-time borrow rate on the money market
• Compound Supply Rate Weights: the weight parameter of the Compound Supply Rate
• Compound Borrow Rate Weights: the weight parameter of the Compound Borrow Rate

For assets that are available on Compound or other money markets:

Borrow APR= Compound Supply Rate Weights * Compound Supply Rate + Compound Borrow Rate Weights * Compound Borrow Rate ()

For assets that are not available on Compound or other money markets

Borrow APR= Rate Curve Constant + Rate Curve Slop * U

New Interest Rate Model:

For assets that are available on Compound or other money markets.

Borrow APR= Compound Supply Rate Weights * Compound Supply Rate + Compound Borrow Rate Weights * Compound Borrow Rate () + _Rate Curve Constant/(1-U)

if U >0.999, _Rate Curve Constant/(1-u) =_Rate Curve Constant * 1000

For assets that are not available on Compound or other money markets

Borrow APR=_rateCurveConstant/(1-U)

In the new model, we added the factor of the capital for assets utilization rates that are available on Compound or other money markets. Also, the new model changed from a linear model to a non-linear model. The borrowing interest can adapt quickly if the utilization of the pool approaches a relatively high level.

Below is how the borrow interest rate curve looks like after the change. Based on the different risk-taking behavior, we categorized the risks based on three different strategies: Conservative Mode, Moderate Model, and Aggressive Model.

Values are set at different levels for parameters including Compound Supply Rate Weights, Compound Borrow Rate Weights, and Rate Curve Constant.

Collateral Switch

In the current contract, each deposited token is defaulted as collateral to gain borrowing power. In this upcoming upgrade, users will have the option to choose whether they want the token as collateral or not.

We have added a collateral switch and users can turn on and turn off the token as collateral. This function gives users more options and also helps to further lower the gas cost for transactions.

48 hour-Delayed Contract Upgrade

We also transfer the owner account of deployed savings contracts to a 48 hr time clock contract. This allows future scheduled upgrades to be executed after 48hrs on the blockchain. The advantage of this change is that the DeFiner community will get an opportunity to review upcoming scheduled contract changes with a 48-hour response time.

FIN Mining

In the upcoming upgrade, FIN mining will be real-time claimable. The current mined FIN is claimable after 2 weeks. Once the upgrade is done, community members can claim tokens in real-time. This will help users better manage their earned FIN tokens.

🙋 Questions?

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