# Interest and Lending Rate

The interest and lending rates as described in the "**Margin and Shorts**" section and the "**Decentralized Leverage**" section are dynamically calculated for each asset.

The interest rate is a 2 step calculation based on the "Borrow Proportion" outlined in the Decentralized Leverage section.

Each asset has a "Minimum Interest Rate", "Maximum Interest Rate", "Prime Interest Rate", "Borrow Proportion" and "Prime Borrow Proportion". All of these variables are self explanatory except for: "Prime Interest Rate" which is the ideal interest rate which should be charged at the "Prime Borrow Proportion".

The Interest Rate rises along with the Borrow Proportion starting at the Minimum Interest Rate up until it reaches the Prime Borrow Proportion, where it will be at the Prime Interest Rate. After that, the Interest Rate will rise in a more rapid manner up until the Max Interest Rate. Below is an example chart of the linear rise of a hypothetical interest rate for an asset with the following values:

Minimum Interest Rate: 1.5%

Prime Interest Rate: 15%

Maximum Interest Rate: 100%

Prime Borrow Proportion: 75%

The lending Rate is then calculated as a percentage of the interest paid out by the user and then distributed amongst all asset holders for that asset's pool, with a spread between the interest and lending rate being paid to EvoX Token holders. The Lending Rate percentage value varies on the asset's Borrow Proportion and current Interest Rate depending on the asset.

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