Higher the minimum rate ?

[MathisGD]

Currently the minimum rate is 1e-18 per second, which is very low (~1e-11% APR). If a market is abandoned and then re-used, this very low rate might take a long time to come back to reasonable values. Maybe it could be capped to something higher.

[MattLsb]

few comments:

• The scenario might look extreme, but if u stays below u_target, the min rate is only multiplied by a factor (up to kd), and hence will stay very low even for infinite period of time. We need to be above u target so that the speed factor starts to increase the rate
• One way to interpret this graph is: someone could borrow all the liquidity available during xx days for free (and lock the lender)

[MattLsb]

Overall I see no interest in having a very low min rate. The borrow demand will not change drastically if the rate is 0.01% or 0.0000001%. It can be considered free in both cases. I would be in favour of implementing min rate = 0.1% (same as Ajna), as this allow for instant reactivity of the rate (see graph). If we think that there may be some assets / cases where a rate below 0.1% makes sense then I would go for 0.01%.

[MattLsb]

What was decided:

min rate = 0.1%:

• it allows the rate to return nearly instantaneously in relevant zone
• further decreasing the rate would not significantly change the incentives to borrow / supply
• At this point, we see no case where a rate of 0.1% would correspond to an equilibrium market rate

max rate = 61.000.000.000.000 \%

• increasing the rate significantly change the incentives to borrow / supply
• in reality, the rate should not be increasing indefinitely, as borrower would get liquidated so utilization would decrease
• this max rate value ensure that there is no overflow

[MathisGD]

Reopened because this is still not in the code