Tokenization & DeFi

Interest Rate

Interest rate in DeFi refers to the percentage of return earned on deposited crypto assets or the cost of borrowing within a protocol. It fluctuates based on market demand, asset volatility, and liquidity pool size. DeFi platforms algorithmically adjust interest rates using supply and demand models, allowing users to lend and borrow without intermediaries. Understanding interest dynamics is essential for maximizing yields or managing debt positions in decentralized finance.

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