Variable interest rate for Genesis loan #40
kevingzhang
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Right now, the genesis loan has a fixed low-interest rate.
In future epoch. When more people deposit their CML and take out the TEA from the pool, the less the pool balance, the higher the interest rate. A higher interest rate will encourage borrowers to repay the loan earlier. If they repay, the pool balance will resume back to the original balance, so the interest rate will drop to normal.
This is AMM
The interest will be calculated in compound rate too. Just like how COFFEE was calculated now.
The interested paid will be burnt, the over due collateral will be burnt too. So there won't be additional TEA generated.
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