> For the complete documentation index, see [llms.txt](https://docs.kyoko.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.kyoko.finance/how-it-works/peer-to-pool-nft-lending-platform/risk-models-health-factor-or-time-based/dual-rates.md). # Dual Rates All pools can choose a pattern between **the fixed rate model** and **the variable rate model**. The creators of permissionless pools can choose to be the fixed rate available in the creation process. ## **The Fixed Rate** This kind of rates act as a fixed rate in the short-term, but can be re-balanced in the long-term in response to changes in the utilization and efficiency of the liquidity. The fixed rate, as its name indicates, will remain pretty stable in a specific lending period. #### fixed rates corresponding to the Overdue Liquidation model If a pool chooses to apply the fixed rate model, when the borrowers borrow ETH from the variable-rate pool using NFT as collateral, there is ***a fixed-time lending period*** to pay back the ETH. If the borrowers' loan is overdue, the collateralized NFT should be liquidated. ## **The Variable Rate** The variable rate will change over time and could be the optimal rate depending on liquidity pools condition. #### Stable rates corresponding to the Health Factor Liquidation model If a pool chooses to apply the variable rate model, when the borrowers borrow ETH from the variable-rate pool using NFT as collateral, there is ***no*** ***fixed-time lending period*** to pay back the loan. As long as your position is safe, you can borrow for an undefined period. However, as time passes, the accrued interest will grow to make your health factor decrease, which might result in your deposited NFT becoming more likely to be liquidated. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.kyoko.finance/how-it-works/peer-to-pool-nft-lending-platform/risk-models-health-factor-or-time-based/dual-rates.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.