> For the complete documentation index, see [llms.txt](https://docs.folks.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.folks.finance/architecture/rebalancing.md).

# Rebalancing

Although a user locks in a borrow interest rate when stable borrowing, under certain conditions, it may be necessary to rebalance their borrow interest rate. Rebalancing means that the user’s stable borrow interest rate is updated to the pool’s current stable interest rate $$i\_{sb\_t}$$

To rebalance the stable rate down, the user’s loan stable rate $$i\_{sb\_{old}}$$ needs to be greater than the current stable rate $$i\_{sb\_t}$$ plus a delta, for instance, ∆=20%.

$$i\_{sb\_{old}}$$≥ $$i\_{sb\_t}$$\*(1+∆)

To rebalance the stable rate up, two conditions have to be met at the same time. The first requires the utilization ratio to be greater than or equal to a given threshold, for instance, $$U\_{RU}=95%$$%. The second requires the deposit interest rate to be less than or equal to a given percentage of the max variable interest rate, for instance, $$DIR\_{RU}=25$$%. 

$$
U\_t \geqslant U\_{RU}
$$

$$
i\_{d\_t} \leqslant	 DIR\_{RU}(R\_{v0}+R\_{v1}+R\_{v2})
$$


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