OKEx to introduce new interest rate setting rules for Savings service and margin trading

OKX

In order to improve user experience and continue providing lenders and borrowers with more market-oriented and competitive interest rates, we have scheduled an upgrade on Dec. 13, 2021 for OKEx Savings and margin trading services.

This upgrade optimizes the logic for interest rate calculation so that it is determined by market auction instead of the ratio of the amount deposited and borrowed.

After this upgrade, loan limits will be increased by ten times and Savings users will only earn interest after successful subscriptions.

Margin trading users will pay the interest determined by the auction every hour, and will no longer be differentiated according to their fee level since 4:00 pm UTC on Dec. 13, 2021. The borrowing limits will, however, still consider fee levels, and will be increased to twice the current limit after the upgrade.

Meanwhile, we will gradually increase borrowing limits and lending limits according to market liquidity and lending scale.

For more details, please refer to: Business Rules for OKEx Savings service .

Savings service upgrade schedule:

1. Stage one – 3:00 pm UTC on Dec. 13, 2021 to 9:00 am UTC on Dec. 14, 2021

The purpose of this stage is to determine the amount and interest rate level when the bidding logic comes into effect.

The Savings service upgrade will start at 3:00 pm UTC on Dec. 13, 2021. During the upgrade subscriptions and redemptions will not be available from 3:00 pm UTC to 7:00 pm UTC on Dec. 13, 2021.

Starting from 4:00 pm UTC on Dec. 13, all assets in Savings will be displayed with the most competitive APY. However, these new rates will only come into effect on Dec 14, 2021. Until then, users will earn interest based on previous rates. The interest payment time will change from 6:00 pm to 7:00 pm UTC every day to every hour. Any interest generated on Dec. 13, 2021 will be distributed between 6:00 pm to 7:00 pm UTC on the same day. Interest generated on and after 4:00 am UTC on Dec. 13, 2021 will be paid on the hour.

Subscription and redemption functions will resume at 7:00 pm UTC on Dec. 13, 2021. Users will then be able to change the subscription modes and interest rates of the placed subscription orders. The interest rates set by users will determine whether the assets can be successfully loaned after the bidding logic officially takes effect.

2. Stage two: 9:00 am UTC onward on Dec. 14, 2021

The auction will officially come into effect at 9:00 am UTC onward on Dec. 14, 2021.

After this, the marketplace will assess borrowing demand every hour and sort bids according to the “minimum lending APY”, going from the lowest to the highest bid. The highest value of the bid is then set as the “current lending APY” and the system follows the rules below based on these parameters:

- If the minimum lending APY < current lending APY, the loan will be successfully lent at the current lending APY.

- If the minimum lending APY > current lending APY, the loan will fail and there will be no interest.

- If the minimum lending APY = current lending APY, the loan may be partially lent or fail.

When the minimum lending APY is the same as the current lending APY, success of the loan will depend on the principle of time priority i.e. based on who applies for it first.

For example, if the total loan amount is 200 BTC and three Savings users place their subscription orders, the chart below shows the logic at work:

user	auction amount	minimum lending APY	successful loan amount	current lending APY
A	100 BTC	10%	100 BTC	20%
B	200 BTC	20%	100 BTC	20%
C	100 BTC	30%	0	-

Since the minimum lending APY or interest rate set by user A is lower than the current lending APY, their entire loan amount of 100 BTC can be sucessfully lent and they earn interest at 20% APY. User B's minimum lending APY is equal to the current lending APY, but since only 100 BTC of the loan amount is left, they can only successfully lend that amount and not the entire 200 BTC.

The minimum lending APY set by user C, however, is higher than the current lending APY, which means their lending attempt will fail and they will not receive interest within this hour. They can then participate in interest rate matching for the next hour.

If the auction is successful for a user, the time of participation is considered T and the interest rate from T to T 1 hours is settled immediately.

For margin trading users, interest is calculated and deducted on the hour at the current lending APY.

OKEx reserves the right to take emergency actions during unexpected events. Any actions and related progress will be communicated via announcements and emails.

For any inquiries regarding this upgrade, please feel free to contact us in the official OKEx Telegram group or via the Support Center.

OKEx,

Dec. 3, 2021

Read the original article at okex

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