Borrow Rate (Lending)
The interest rate borrowers pay to access funds from a lending pool.
What is Borrow Rate (Lending)?
Borrow rate is the annualized cost of borrowing digital assets, varying with pool utilization and asset type. For instance, borrowing DAI on Compound at 80% utilization might incur a 7% borrow rate. Rates are typically variable, rising with demand, though fixed-rate borrowing is available on platforms like Aave. In 2025, borrow rates for stablecoins average 5–8%, per DefiLlama.
High utilization during 2024’s bull run pushed borrow rates to 15% for ETH on some protocols, reflecting market dynamics. Borrowers monitor rates to optimize costs, often using lending aggregators to find the lowest rates across platforms.
Related Terms
Semantic Payment Metadata
Structured data describing payment terms for machine processing.
Pool Depth (DEX)
The total value of digital assets in a DEX liquidity pool, determining its ability to handle trades with minimal price impact.
Liquid Staking
A staking mechanism on Ethereum where users receive derivative tokens representing their staked ETH, allowing them to use these tokens in DeFi activities while earning staking rewards.
Permissionless
A system where anyone can participate without needing approval or authorization.
MEV Vulnerability
The susceptibility of DeFi protocols to value extraction by miners or validators through transaction reordering or insertion.
Morpho
A permissionless decentralized lending protocol on Ethereum and Base that optimizes rates by matching lenders and borrowers peer-to-peer atop pools like Aave and Compound.