# Jump (Kink) Model

**Jump (Kink) Model**is a formula that is used for markets that have typically higher historical utilization. Resulting interest rate in this model will be significantly higher than that of under the Standard Model regime to encourage heavier supply and discourage further borrowing.

Borrow Rate: Base Rate + [Multiplier x min(Kink, Utilization)] + [Jump Multiplier x max(0, Utilization - Kink)Supply rate: Borrow Rate x Utilization Rate x (1 - Reserve Factor)whereKink= The cut-off point in utilization rate where interest rate follows the Jump Model (e.g., 80%)Jump Multiplier= Scale factor per utilization under Jump ModelBase Rate, Utilization Rate and Multiplier= same as above

Last modified 1yr ago