Interest Rates

How supply and borrow rates are set by the IRM and utilization; AdaptiveCurveIRM and target utilization.

Interest rates on Bend are set by each market’s Interest Rate Model (IRM). If you’re building a borrow integration, you need to show how rates work and how they affect positions.

IRM role

Each Bend market has a single, immutable IRM. That contract computes the borrow rate from market conditions, mainly utilization (total borrows / total supply). Only IRMs approved by Bend governance can be used; the main one is AdaptiveCurveIRM.

AdaptiveCurveIRM

AdaptiveCurveIRM targets 90% utilization.

• Below 90%: Borrow rate falls to encourage borrowing.
• Above 90%: Borrow rate rises to encourage repayments and more supply.

That keeps markets capital-efficient while keeping enough liquidity for withdrawals. For formulas and behavior, see Interest Rate Model.

Finding the market rate

To get the rate at a given utilization (e.g. 80%) for a market:

• Morpho Contract - To retrieve IRM for market
• IRM Contract - Query rate at utilization point (e.g. 80%)

With the assumption that you will use one of the following markets:

Market	MarketId
wsRUSD / HONEY	0x04d3b8b00c6f3b75481492b76139473e2368339ee58587df65684fdb9103984e
WBTC / HONEY	0x950962c1cf2591f15806e938bfde9b5f9fbbfcc5fb640030952c08b536f1f167
sUSDe / HONEY	0x1ba7904c73d337c39cb88b00180dffb215fc334a6ff47bbe829cd9ee2af00c97
wgBERA / HONEY	0x63c2a7c20192095c15d1d668ccce6912999b01ea60eeafcac66eca32015674dd
WETH / HONEY	0x1f05d324f604bd1654ec040311d2ac4f5820ecfd1801a3d19d2c6f09d4f7a614
WBERA / HONEY	0x147b032db82d765b9d971eac37c8176260dde0fe91f6a542f20cdd9ede1054df
iBERA / HONEY	0x594de722a090f8d0df41087c23e2187fb69d9cd6b7b425c6dd56ddc1cff545f0

Step 1 - Determine IRM contract

Go to https://berascan.com/address/0x24147243f9c08d835C218Cda1e135f8dFD0517D0#readContract and enter one of the MarketIds from above in the idToMarketParams field.

The returned result should provide something similar to the following:

Name	Type	Value
loanToken	address	0x0dE23153BC280dD95BE914ddafb5591aE877e067
collateralToken	address	0xC3aD1095c231bb5D25E7EB1Aa23de7A9439EA12c
oracle	address	0xc76A0E60016dFd4B18Db71b6DaEF769bc8057a3d
irm	address	0x1d5376e532CcF25b740270624111D665830E5dB9
lltv	uint256	945000000000000000

Take note of the irm address and go to that address on BeraScan.

Step 2 - Determine Market Rate Target Utilization

Enter one of the MarketIds from above into the rateAtTarget field.

How interest accrues on debt

For a borrower, the most important takeaway is that interest is constantly accruing, increasing their total debt over time. This directly impacts their position’s health.

The process is as follows:

1. Rate calculation

The IRM calculates the instantaneous borrowRate based on the market’s current utilization.

2. Interest accrual

This rate is applied to the borrower’s debt continuously. The amount of interest accrued increases the totalBorrowAssets in the market and, proportionally, the asset value of each borrower’s borrowShares.

3. Impact on Health Factor

As the debt value increases due to accrued interest, the user’s LTV rises and their Health Factor falls, even if collateral and asset prices remain stable.

Health Factor = (Collateral Value x LLTV) / (Initial Debt + Accrued Interest)

This is a critical concept to communicate to users: their position can become riskier over time simply from interest accrual.

Onchain state and accrueInterest

The Bend contract does not update interest for every block to save gas. Instead, interest is calculated and applied only when a market interaction occurs via the _accrueInterest internal function. This function is triggered by actions like borrow, repay, supply, and withdraw.

When you fetch a user’s position from the contract, the totalBorrowAssets value reflects the state at the last interaction. To get the up-to-the-second debt value, you must account for the interest accrued since the lastUpdate timestamp.