7up.finance Utilization Rate Explained

2 min readOct 27, 2020


7up.finance is a DeFi Filecoin (FIL) lending and investment platform based on Binance Smart Chain.

Through matching the FIL holders and FIL seekers, 7up.finance is designed for the FIL borrowing market.

Meanwhile, on the 7up.finance platform, lending itself is a way of mining. Once a loan contract takes effect, the borrower and lender will both receive rewards in 7UP, the native token of the platform.

What is the Utilization Rate?

The utilization rate on a lending platform refers to the percentage of the borrowed assets of supplied assets.

The utilization rate is 99.99%, meaning there is only 0.1437 FIL available to redeem for suppliers.

Utilization rate = Borrowed asset / (Borrowed asset + Asset in the supply pool)

The utilization rate is 100% when all the supplied assets are borrowed. When the utilization rate is 100%, there is no asset remaining in the supply pool and suppliers are unable to withdraw their assets until more supply is injected, or the borrowers repay their loans.

Similarly, when the utilization rate is too low, suppliers may be able to withdraw the assets they supplied if that figure is larger than the remaining supply volume.

What is the Utilization Rate for?

Apart from letting the suppliers and borrowers better understand the current lending market conditions, the Utilization rate also helps dynamically adjust the lending interest rate, in order to keep a balanced borrow/lending relation.

7Up adopts the following dynamic interest rate mechanism:

Lending interest rate = Base interest rate + Utilization rate * Market popularity

Deposit interest rate = Utilization rate * Lending interest rate

It can be seen that when the utilization rate becomes higher, meaning more assets are borrowed, the lending interest rate will become higher, which will incentive suppliers to supply more and discourage borrowers to borrow. Hence, a balanced supply and borrow relation will be maintained.

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