The team explained that the new update would increase protocol capital efficiency and allow borrowers to obtain better interest rates at the same utilization rate. For instance, the APY for borrowers will be between 10.96% and 20.2% at a utilization rate of 80-90%.
Before now, the utilization rate of Iron Bank hovered around 40%. This resulted in large amounts of unproductive assets in the protocol. CREAM wrote:
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Source: Cryptocurrency - investing.com