The interest rate tells you how much you pay / receive per year for borrowing / lending out an asset. While lenders benefit from high interest rates, borrowers want the interest to be as low as possible. An efficient system, therefore, has an interest rate both parties accept and that has the lowest possible spread between both interest parties.
For a protocol like DeltaPrime, fitting interest rates is crucial. In the following pages, we explain how DeltaPrime decides on its interest model and how the interest is calculated.