Interest Rates & Quotas

Gearbox uses a two-part interest model: a base interest rate driven by pool utilization, and quota rates that add per-token fees for collateral exposure. Together they determine the total borrowing cost for credit accounts.

Base Interest Rate Model

The base rate follows a linear kinked model with three slopes, similar to Aave/Compound. Parameters are set per pool.

Parameter	Description
`U1`	First utilization kink (basis points)
`U2`	Second utilization kink (basis points)
`Rbase`	Base rate at 0% utilization
`Rslope1`	Rate slope between 0 and U1
`Rslope2`	Rate slope between U1 and U2
`Rslope3`	Rate slope above U2 (steep penalty zone)

Reading Model Parameters

TypeScript

import { iLinearInterestRateModelV3Abi } from "@gearbox-protocol/sdk";

// Get the IRM address from the pool
const irmAddress = await publicClient.readContract({
  address: poolAddress,
  abi: iPoolV3Abi,
  functionName: "interestRateModel",
});

// Query model parameters
const params = await publicClient.readContract({
  address: irmAddress,
  abi: iLinearInterestRateModelV3Abi,
  functionName: "getModelParameters",
});

const [U1, U2, Rbase, Rslope1, Rslope2, Rslope3] = params;
console.log(`Kink 1: ${U1} bps, Kink 2: ${U2} bps`);
console.log(`Slopes: ${Rbase} / ${Rslope1} / ${Rslope2} / ${Rslope3}`);

Current Rates via SDK

TypeScript

const market = sdk.marketRegister.findByPool(poolAddress);
const pool = market.pool;

const RAY = 10n ** 27n;
const supplyAPY = Number(pool.supplyRate * 10000n / RAY) / 100;
const borrowAPR = Number(pool.baseInterestRate * 10000n / RAY) / 100;

console.log(`Supply APY: ${supplyAPY.toFixed(2)}%`);
console.log(`Base Borrow APR: ${borrowAPR.toFixed(2)}%`);

Quota System

Quotas regulate how much pool capital can be exposed to specific collateral tokens. Each quoted token carries its own interest rate on top of the base borrow rate.

How Quotas Work

A credit account's "quota" for a token is the amount of debt backed by that collateral.
Quota interest is additive (linear), not compounding. The PoolQuotaKeeper tracks a cumulativeIndex per token.
If totalQuoted reaches the limit for a token, any transaction that increases that quota reverts with QuotaIsOutOfBoundsException.

Reading Quota Parameters

TypeScript

import { getContract } from "viem";
import { poolQuotaKeeperV3Abi } from "@gearbox-protocol/sdk";

// Get the QuotaKeeper address
const quotaKeeperAddress = await publicClient.readContract({
  address: poolAddress,
  abi: iPoolV3Abi,
  functionName: "poolQuotaKeeper",
});

const quotaKeeper = getContract({
  address: quotaKeeperAddress,
  abi: poolQuotaKeeperV3Abi,
  client: publicClient,
});

// Get global quota parameters for a token
const tokenParams = await quotaKeeper.read.getTokenQuotaParams([tokenAddress]);

The returned object contains:

Field	Type	Description
`rate`	`uint16`	Annual interest rate in basis points
`cumulativeIndex`	`uint192`	Accumulated interest index
`quotaIncreaseFee`	`uint16`	One-time fee on quota increases (basis points)
`totalQuoted`	`uint96`	Total quota across all credit accounts
`limit`	`uint96`	Maximum allowed `totalQuoted`
`isActive`	`bool`	Whether the token is actively quoted

Checking Available Quota

TypeScript

const tokenParams = await quotaKeeper.read.getTokenQuotaParams([tokenAddress]);
const availableQuota = tokenParams.limit - tokenParams.totalQuoted;

console.log(`Total quoted: ${tokenParams.totalQuoted}`);
console.log(`Limit: ${tokenParams.limit}`);
console.log(`Available: ${availableQuota}`);
console.log(`Rate: ${tokenParams.rate} bps`);

Per-Account Quota and Interest

Query how much quota an individual credit account is consuming:

TypeScript

const [quoted, outstandingInterest] = await quotaKeeper.read.getQuotaAndOutstandingInterest([
  creditAccountAddress,
  tokenAddress,
]);

console.log(`Account quota: ${quoted}`);
console.log(`Outstanding interest: ${outstandingInterest}`);

Rate Setting: Gauge vs. Tumbler

Quota rates are set by an external contract implementing IRateKeeper. There are two models:

GaugeV3 (Voting Model)

Used in the core protocol. GEAR token stakers vote to move rates between a minRate and maxRate for each token.

TumblerV3 (Curator Model)

Used in the permissionless ecosystem. Curators set exact rates directly.

Function	Description
`setRate(address token, uint16 rate)`	Set rate in basis points
`updateRates()`	Apply pending rate changes
`epochLength`	Minimum time between rate updates

Rates set via Tumbler only take effect after updateRates() is called, and the Tumbler enforces an epochLength to prevent frequent manipulation.

Total Borrowing Cost

The total interest rate for a credit account is:

Total Rate = Base Borrow Rate + Sum(Quota Rate_i * Quota_i / Debt)

Where each quoted token contributes its quota rate proportional to the quota amount relative to total debt.

Next Steps

Insurance Mechanism -- How fees fund the insurance buffer
Pool Operations -- Deposit and withdraw liquidity
Markets Data -- Query pool and credit manager state