Interest Rates¶
Interest rates in Moosh are determined by market conditions rather than fixed rules or discretionary intervention. When demand for borrowing increases relative to available liquidity, interest rates rise. When liquidity is abundant and borrowing demand is lower, interest rates decline accordingly.
Interest accrues continuously over time and is applied automatically at the protocol level. Borrowers accrue interest on outstanding debt, while suppliers earn interest proportional to utilization and prevailing rates. Users do not need to take any action for interest to be applied.
Because interest rates are dynamic, they can change frequently in response to market activity. Higher interest rates often reflect higher utilization and increased risk within a market. During the testnet phase, interest rate behavior is observed for system validation and should not be interpreted as indicative of long-term or mainnet conditions.
Annual Percentage Yield (APY)¶
Annual Percentage Yield (APY) is a descriptive metric that expresses current interest conditions in annualized terms. It is intended to help users compare relative yield levels under existing market conditions.
APY is not a prediction or a guarantee of future returns. Because it is derived from current interest rates, APY can change rapidly as borrowing demand, liquidity levels, or risk parameters evolve. Short-term fluctuations are expected, especially during periods of active testing.
In the context of the testnet, APY is provided solely for behavioral observation and interface clarity. It should not be used for performance evaluation or yield optimization. Testnet APY values may be adjusted, reset, or become temporarily inconsistent as part of ongoing system testing.
Fees & Risk Parameters¶
Moosh enforces fees and risk parameters through transparent, protocol-defined rules rather than discretionary control. These mechanisms exist to align incentives, manage risk, and preserve system integrity under varying market conditions.
Protocol Fees¶
Fees may be applied as part of standard lending and liquidation processes. These fees are enforced automatically by smart contracts and are visible on-chain. Exact fee levels depend on market configuration and may change during the testnet phase.
Core Risk Parameters¶
Risk within each market is governed by a set of explicit parameters, including:
- Loan-to-Value (LTV): the maximum borrowing capacity relative to supplied collateral
- Liquidation Threshold: the point at which a position becomes eligible for liquidation
- Liquidation Penalty: the cost incurred when a position is liquidated
These parameters define the boundaries within which users can safely operate. Exceeding them may result in partial or full liquidation of collateral.
During the testnet, risk parameters may be adjusted to observe system behavior and validate enforcement under different conditions. Users are encouraged to focus on understanding risk boundaries rather than maximizing leverage. Testnet parameters do not represent final mainnet settings.