Interest Rates are set by market conditions and influenced by the PID Controller.
Neptune uses a PID Controller to tune market efficiency.
The PID controller adjusts borrow rates at set intervals to help the market approach its Target Setpoint. This interest rate model helps Neptune compete by better matching supply to demand through dynamic reactions to current market usage.
The Target Setpoint is the desired utilisation for each market to perform best for both lenders and borrowers. The PID target setpoint gradually influences the borrow rate when the market is near its target and more radically adjusts when further from its target.
Utilisation is a measure of borrowed capital to lent capital. For example, a market with $100m lent and $50m borrowed, has a market utilisation ratio of 0.5 or 50%.