Utilization Rate (Lending)
The percentage of a lending pool’s deposited assets that are currently borrowed.
What is Utilization Rate (Lending)?
Utilization rate measures the proportion of a lending pool’s supplied assets that borrowers have taken out, directly influencing interest rates. For example, a 70% utilization rate means $700 of a $1,000 pool is borrowed. High utilization (e.g., 90%) increases borrow rates and supplier yields, while low rates signal excess liquidity. Aave’s USDC pool reported an average 65% utilization rate in Q2 2025, per DefiLlama.
This metric helps protocols balance supply and demand. Optimal utilization (typically 70–80%) ensures liquidity without discouraging borrowers. In 2024, high utilization during market rallies pushed borrow rates to 15% on some Compound pools, reflecting dynamic rate algorithms.
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