Borrow Rate (Lending)
The interest rate borrowers pay to access funds from a lending pool.
What is Borrow Rate (Lending)?
Borrow rate is the annualized cost of borrowing digital assets, varying with pool utilization and asset type. For instance, borrowing DAI on Compound at 80% utilization might incur a 7% borrow rate. Rates are typically variable, rising with demand, though fixed-rate borrowing is available on platforms like Aave. In 2025, borrow rates for stablecoins average 5–8%, per DefiLlama.
High utilization during 2024’s bull run pushed borrow rates to 15% for ETH on some protocols, reflecting market dynamics. Borrowers monitor rates to optimize costs, often using lending aggregators to find the lowest rates across platforms.
Related Terms
Same Activity Same Risk Same Regulation (Hong Kong)
Hong Kong's regulatory principle ensuring uniform oversight for financial activities with equivalent risks, applied to stablecoin issuance under the Stablecoins Ordinance effective August 2025.
Option Value (MSTR)
The premium paid for an option contract, reflecting intrinsic and time value.
Mining and Miner
Mining is the process of validating transactions and adding new blocks to a blockchain by solving computational puzzles, and a miner is who performs this task to earn rewards.
MiCA
EU regulation governing digital assets, including stablecoins, for market integrity and consumer protection.
Market Cap
The total value of a digital asset’s circulating supply, calculated by multiplying its current price by the number of coins or tokens in circulation.
Off-Chain
Transactions processed outside the main blockchain, settled periodically on-chain for efficiency.