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Interest Rates

📈 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 declines, interest rates decrease accordingly.

Interest accrues continuously over time and is applied automatically at the protocol level:

  • Borrowers accrue interest on outstanding debt
  • Suppliers earn interest proportional to market utilization and prevailing rates

Users do not need to take any action for interest to be applied.

Because interest rates are dynamic, they may change frequently in response to market activity. Higher 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) expresses current interest conditions in annualized terms, allowing users to compare relative yield levels across markets.

APY is not a prediction or guarantee of future returns.

Because it is derived from current interest rates, APY may change rapidly as:

  • Borrowing demand changes
  • Liquidity levels shift
  • Risk parameters evolve

Short-term fluctuations are expected, particularly during periods of active testing.

Within the testnet environment, APY exists primarily 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 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 systemic risk
  • Preserve market stability under varying conditions

💰 Protocol Fees

Fees may be applied as part of standard lending and liquidation processes.

These fees are:

  • Enforced automatically by smart contracts
  • Fully visible on-chain

Exact fee levels depend on individual market configurations and may change during the testnet phase.

🛡️ Core Risk Parameters

Each market operates within clearly defined risk boundaries.

Key parameters include:

  • 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 conditions under which positions remain safe.
Exceeding these boundaries may result in partial or full liquidation of collateral.

During the testnet phase, 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 should not be interpreted as final mainnet settings.