# Lending rates are a utilization signal, not a yield promise

URL: https://www.caijing188.com/lending-rates-utilization/
Published: 2026-10-19T10:09:39+08:00 | Updated: 2026-10-27T22:10:00+08:00
Verified: 2026-10-27

## Quick answer
Lending rates on-chain are set by utilization. A high rate means the pool is nearly fully borrowed, which is both why the yield is high and why you may not be able to withdraw. The exit, not the rate, is the risk.

## Summary
A 12% APY exists because borrowers are paying it today. It can become 3% in a week without a single bad loan.

## Key takeaways
- Check utilization before deposit size.
- Model the rate after a 20% withdrawal.
- Treat a kink jump as a risk signal.

## FAQ
Q: Why is the APY so high?
A: Because utilization is near the kink and borrowers are paying a premium for the last available liquidity. It falls as soon as borrowing demand drops.
Q: Can I always withdraw?
A: Only up to the liquidity that has not been borrowed. In a full pool, you wait for repayments or for new deposits.