# Supply Rate

Liquidity providers can earn interest returns based on market dynamics, borrowing and lending activities, and the availability of funds within the protocol. The rates are determined by algorithms that consider supply, demand, and participant activities.

*Weighted Average Cost of Borrowing*

$\bar{R_t} = \frac{variable\ debt}{total\ debt} \times {R_{variable}} + \frac{stable\ debt}{total\ debt} \times {R_{stable}}$

*Interest Rate of Deposit*

${LR}_t = \bar{R_t}{
U_t} \times (1 - Reserve\ Factor)$

$U_t$ is *Current liquidity pool utilization rate*

The actual compound interest calculation formula for users' deposit interest, which increases over time, is as follows:

$Actual\ APY = (1+\frac{Theoretical\ APY}{secsperyear})^{secsperyear}-1$

Earning interest on the portion of their assets borrowed by others.

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