Supply rate

The interest rate paid by borrowers is distributed as yield to users who supplied to a respective lending pool, excluding a “spread” that is sent to the ecosystem reserve (the amount is determined by the reserve factor).

Supply interest rate = utilization rate * borrow rate * (1 - reserve factor)

If the utilization rate of a lending pool is 50% and the borrow rate is 10%, then borrowers are only paying 10% on half of the assets supplied. As a result, lenders will actually only receive 5% on their capital (minus the reserve factor).