Rates and Rates Multipliers

Brunch will likely have higher rates compared to Dai and other large CDPs. Part of that is trust, which takes time. Part is also lower quality collateral, which requires a higher yield in order to reward investors to provide the lending capital, which is done through their buying and holding bUSD, primarily as sbUSD.

Rates will be completely market-driven. If the price of bUSD is beaneth the target $1 peg, rates will continue to increase until there’s sufficient demand to buy it. If the price is high, rates will decrease until there’s sufficient demand for leverage.

In order to account for tokens that have different levels of risk, within the same system, we assign a rates multiplier for each token. So if the base rate is 20%, and a token has a 1.5x multiplier, borrowers against that token will be charged 30%.