How to Calculate and Repay Interest

Calculating and repaying interest

1. Interest Calculation

KuCoin calculates hourly interest based on the principal and hourly interest rate. You can check hourly interest details by accessing Order → Cross/Isolated Margin → Interest.

Initial Interest Charge: Once you successfully borrow the funds, interest begins to accrue immediately.

Ongoing Interest Calculation: Following the initial interest charge, interest is calculated and applied hourly.

2. Hourly Interest Repayment

The system automatically repays the interest every hour, and the accumulated debt is updated accordingly.

3. Interest Allocation

The platform charges 5% of the interest income as a service fee.

An additional 10% of the interest income is allocated to a risk reserve fund.

 

Hourly Rollover Interest

To facilitate hourly interest payments to lenders, the system borrows the interest portion every hour from the lending pool and repays it to the lenders, while adding the borrowed interest amount to the borrower's debt.

How it works:

1. The system first borrows an amount equal to the hourly interest in the relevant cryptocurrency.

2. The borrower's debt is then increased by this amount.

3. The borrowed interest amount is then paid to the lender in the respective currency.

Under certain circumstances, interest payments might fail. These include:

a. The currency being delisted from the free lending market.

b. The currency having insufficient depth in both the margin trading and lending markets.

In case of failure when borrowing interest, the system will liquidate the necessary portion of assets to repay the interest. If the user holds enough of the necessary cryptocurrency, the interest amount is deducted; otherwise, assets are liquidated to cover the hourly interest.