# Applied Interest Rates

Each youves tracker token has its own set of asset and liability interest rates, which are calculated as explained in interest rate response.

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Asset Interest RatesAn asset interest rate is applied to the balance of stable tokens. The asset interest rate is the result of the calculation explained in interest rate response.
In order to earn the interest rate on their stable token balances, holders have to stake stable tokens in the savings pool / minter conversion pool.

The application of the rate is done in two steps: At first it is applied to all stable tokens on the platform. Each time the interest amount is calculated, it is made available to holders who have staked stable tokens in the savings pool to which the rate will apply.

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Example- We start with the following assumptions:
- The current total amount of youves tracker token balances is uUSD 1,000,000.
- The asset interest rate per second is 1.55E-09 (roughly 5% per annum).
- A fraction of 25% of all stable tokens (uUSD 250,000) is put into the savings pool for saving.
- Finally the observed time period is four hours.

- During the course of these four hours (14,400 seconds), the total asset interest rate income on the platform will be roughly uUSD 22.32. This interest income is available for savers in the platform.
- During this hour only the fraction of 25% of all youves tracker tokens are put into the savings pool for saving. Therefore the interest rate income of uUSD 22.32 will be available for claim by the savers in the pool.
- Effectively each uUSD in the savings pool is eligible to claim 8.93E-5 uUSD, which is roughly equivalent to a 20% annualised rate over the four hour time period.

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Liability Interest RatesThe liability interest rate is applied to outstanding youves tracker tokens in vaults. It is equal to the used interest rate plus a spread of 3.16E-10, this spread is roughly equivalent to 1.00% in annual interest rates.

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Example- We start with the following assumptions:
- We follow the example of the asset interest rates and all its parameters.
- The outstanding youves tracker token amount is also uUSD 1,000,000.
- The interest rate spread per second is 3.16E-10.
- As a consequence, the liability interest rate per second is 1.89E-09 (roughly 6.04% per annum).

- During the course of the four hours (14,400 seconds), the total change in libilities though the liability rate on the platform will be roughly uUSD 26.87, resulting in an outstanding youves tracker token amount of roughly 1,000,026.87.
- The liability interest rate affects all oustanding youves tracker tokens equally, there is no additional complexity as in the asset interest rates.

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Platform Interest IncomeThe spread (difference) in interest rates which is applied to assets and liabilities comprises the interest rate income of the platform.