> For the complete documentation index, see [llms.txt](https://docs.goldlink.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.goldlink.io/risk/interest-rate-models.md).
# Interest Rate Models
GoldLink allows Lenders users who deposit capital into strategies to earn interest automatically. Interest is calculated based on the utilization of funds within the lending pool. This calculation uses a kinked rate slope model with an optimal utilization rate of 90%.
Borrowers on GoldLink can take out loans against their collateral within individual strategy accounts.
The interest rate is calculated as follows largely borrowing from [AAVE](https://docs.aave.com/risk/liquidity-risk/borrow-interest-rate).
Given the above kinked slope curve, we find that rates for borrowers increase as pool utilization increases up to the point of optimal utilization. After that point, the rates increases significantly in order to incentivize proper liquidity balance.
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