Lending

## Long Position Borrows

Long positions using margin borrow USDC from trading accounts across the cypher platform. USDC deposited into trading accounts is automatically included in the supply for prospective long positions to borrow from.

## Short position borrows

Minters provide the initial assets to enable long positions. After initial long positions have been opened, they are automatically included in the supply for prospective short sellers to borrow against. The lower the ratio of long positions to short positions, the more interest shorts need to pay to longs. The greater the ratio of long positions to short positions, the less interest shorts need to pay to longs.

## Protocol borrowing/lending dynamics

Due to the nature of a linear-piecewise interest rate pricing model, the borrow interest rates for both long positions and short positions increases considerably when the
$\frac{\textrm{borrows}}{\textrm{borrows + deposits}}>75\%$
The dynamics of borrow interest rates can be graphically represented as a piecewise function where the 'kink' represent the optimal utilization ratio which is 75% on cypher: