# 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 Rates### #

Savings V1 DiscontinuedThe savings contract "savings V1", which was in place since the launch of youves on the mainnet does no longer give out rewards from Tuesday 26 November 12:00pm UTC. Any uUSD which are kept in "savings V1" will have to be actively moved by their owners. Any potential bailout / minter conversion right will no longer be exercised against uUSD in "savings V1".

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New Savings V2Tuesday 26th of October at 12:00pm UTC, the savings unlock period is be introduced to youves. The upgrade relates to the amendment proposal YIP-001 C that was accepted in a vote by YOU holders. The introduction of the savings unlock period will be managed by introducing a new savings contract called “savings V2”. Putting uUSD into the "savings V2" works the same as it did with "savings V1". Holders of uUSD will have to unlock and claim interest from “savings V1” first and then lock-in their uUSD in the “savings V2” contract, to receive interest rewards going forward.

The introduced unlock period of six weeks allows users to claim uUSD from the “savings v2” at any time. Instantly after claiming uUSD, the claimed amount is moved from the savings account into a vesting account where it vests for six weeks without receiving rewards. After the vesting period, funds can be withdrawn and transferred, used as collateral (uUSD) or used to repay outstanding debt. Any potential bailout / minter conversion right will be exercised against uUSD in "savings V2" which have not been claimed yet.

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Asset Interest Rate MechanicsAn asset interest rate is applied to the balance of all tracker tokens of each type. The asset interest rate is the result of the calculation explained in interest rate response.
In order to earn the interest rate on their tracker token balances, holders have to stake tracker 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 tracker tokens of one type on the platform. Each time the interest amount is calculated, it is made available to holders who have staked tracker tokens of that type in the savings pool to which the rate will apply.

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ExampleThe below example is on uUSD, the same logic applies to other tracker tokens also.

- 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 uUSD (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 of each type in vaults. It is equal to the used asset interest rate for the same type of tracker token 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.