Kink Point

The Kink Point is a specific utilization ratio threshold in an interest rate model where the slope of the interest rate curve changes. Below this point, interest rates typically increase at a moderate pace to encourage borrowing.

Above this point, the interest rate increases much more aggressively to discourage further borrowing and preserve pool liquidity. This transition point is carefully chosen by protocol designers to balance capital efficiency with system stability.

It acts as a soft barrier that guides user behavior toward a desired utilization range. The kink point is a critical parameter that helps define the personality and risk profile of a lending protocol.