> For the complete documentation index, see [llms.txt](https://docs.invast.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.invast.io/rwa-suite-and-dapp-ecosystem/lending-and-borrowing-platform/dynamic-interest-rates.md).

# Dynamic Interest Rates

Interest rates are algorithmically adjusted using a utilization-based model: 

* If a lending pool is heavily utilized, borrowing rates increase to incentivize more liquidity provision.
* If utilization is low, borrowing becomes cheaper to stimulate activity.