# Interest The interest rate tells you how much you pay / receive per year for borrowing / lending out an asset. Lenders benefit from high interest rates, and borrowers benefit from low rates. An efficient system, therefore, has an interest rate both parties accept and that has the lowest possible spread[^1] 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. [^1]: The spread is the difference between the percentage that borrowers pay and depositors receive. This number is dependent on the percentage of deposited funds that is lent out. For example: Total deposits: $100 total borrowed: $50 Borrowing rate: 100% ($50 per year) Deposit rate: 50% ($50 per year) Spread = 50%. A lower spread leads to higher capital efficiency, and a better overall market for all participants. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.deltaprime.io/liquidity-pools/interest.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.