# Utilization Rate

Each currency reserve has a different utilization rate:

$$
U=TotalBorrows/TotalLiquidity
$$

*U* monitors which share of the reserve’s total asset is borrowed at time *t*.

As *U* gets closer to 100%, the asset becomes scarcer. No more liquidity is available at $$U=100%$$. This situation can be problematic if depositors wish to withdraw their liquidity with no assets available.

Nevertheless, high utilization results in high returns for depositors. It's therefore essential to maximize utilization while protecting their liquidity.

The interest rate model is adjusted around an optimal utilization rate $$Uoptiomal$$ per reserve that reflects market conditions.

The historical utilization rate helps users track the risk emerging from the lack of liquidity. This analysis is based on the maximal daily Utilization, a conservative metric proxy for liquidity.

### &#x20;<a href="#stablecoins" id="stablecoins"></a>


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