Utilisation — How do we electrify DeFi? (pt. 1)

Infinity Exchange
Published in
1 min readAug 18, 2022



  • Utilisation is the mechanism underpinning how today’s DeFi lending protocols set their interest rates.
  • The primary inefficiency of today’s DeFi lending markets is wide bid-offers between lending and borrowing rates.
  • These wide bid-offers plaguing lending protocols today are not considered tenable for ‘institutional finance.’
  • We discuss the concept of Utilisation and how it currently ‘sets’ interest rates on decentralised borrow & lend platforms such as Aave and Compound. This article accompanies (What is Utilisation?) which draws out the importance of Utilisation and how the current DeFi ecosystem could grow 10x overnight…

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