# Standard Model **Standard Model** is used for markets that have relatively lower historical utilization (typically below 80%). Under the standard model, here are how the rates are calculated: > ***Borrow rate**: Base Rate + (Multiplier x Utilization Rate)* > > ***Supply rate**: Borrow Rate x Utilization Rate x (1 - Reserve Factor)* > > where > > **Base Rate** *=* The minimum (floor) borrowing rate > > **Multiplier** = Scale factor per utilization > > **Utilization Rate** = Asset borrowed / Total asset supply > > **Reserve Factor** = Percentage of spread between supply & borrow (the protocol's revenue to be kept in treasury) From the formula, we can see that Utilization Rate is the only dynamic parameter, whereas Base Rate, Multiplier, and Reserve Factor are determined as “constant”. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://tectonic.gitbook.io/docs/protocol/interest-rate-models/standard-model.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.