Understanding interest charges

Interest charges are incurred when you borrow assets through Margin Services. Please see section on Lenders' risks in the Risk Warnings.

• Interest is calculated on each loan at the applicable APR and is payable by borrowers.

• Interest is paid each hour, up front, from the moment of opening a loan.

• A minimum of one hour’s interest is calculated and is payable on each loan, even if the loan’s period is shorter than one hour or the loan is repaid sooner.

When you agree to borrow a certain amount, the hourly interest charge is calculated using the following formula:

Borrower Interest Charge = ((1 + APR) ^ (1 / 365 * 24) - 1) * Borrow * (1 + Multiplier * Taker Fee)

Where:

APR: The base Annualized Percentage Rate to borrow the given asset
Borrow: The amount that is borrowed under a margin loan
Multiplier: Multiplier of the taker fee applicable to all borrowers, currently set to 1,000
Taker Fee: The borrower’s individual taker fee

Calculation example

Assuming:
APR = 10% (0.1)
Borrow (Amount borrowed) = 2 BTC
Multiplier = 1000
Taker Fee = 0.01% (0.0001)

Borrower Interest Charge
= (1.10 ^ (1 / 8760) - 1) * 2 BTC * (1 + 1000 * 0.0001)
= 0.00002394 BTC (for one hour)

Please note that this is just an example calculation based on the given formula and values provided, and actual interest charges may vary depending on various factors.