Hi guys! New here I have a question. On Llama

Lend, I noticed the borrow APR is 40% to borrow crvUSD against CRV collateral.

Wondering why the utilization is so high even at such a high borrowing cost? Surprised the market wouldn’t adjust and reduce the high borrowing cost. Does anyone have insights on this? Thanks 🙏

The borrow rate is based entirely off the utilization rate ser.... Check this out

Thanks, I understand the borrow apr is based on the utilization. My question is, why would people still be borrowing at such a high apr? Is there maybe a market for the crvUSD that earns more than 40%? Otherwise doesn’t make sense to borrow at such a high cost

I cannot speak for what users are doing with their borrowed crvusd other than to say that yes, yields are quite high and there are several places to earn good yields with crvusd. Also, as we said, the rate fluctuates quite a bit. It was about 10% lower earlier today so i would say the averages are def. lower..

Makes sense. They could have purchased crvUSD and then used other assets to borrow more. So the total borrowed isn’t 100% of their crvUSD bags. Then utilize it elsewhere for the sweet sweet apr’s.

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