Redemption Fee

The formula for calculating the redemption fee:

$Redemption\ Fee\ =\ (baseRate + 0.5\%) × borrowed\ USDA$

The Redemption Fee in the Agilely Protocol is a one-time charge that comes into play when users redeem their USDA. This fee's calculation is based on a dynamic variable called the baseRate. Each time there's a redemption, the baseRate goes up a bit, and it gradually goes down over time since the last fee event (see baseRate).

The fluctuations in the baseRate directly impact the redemption fee, which, in turn, shapes the overall cost of borrowing. This deliberate interplay ensures that borrowers thoughtfully assess their borrowing decisions, cultivating an environment of balanced borrowing practices.