> For the complete documentation index, see [llms.txt](https://ifichi.gitbook.io/ifichi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ifichi.gitbook.io/ifichi/what-is-ifichi/introduction/interest-rate-mechanics.md).

# Interest Rate Mechanics

Distinctively, IFICHI does not have protocol-set interest rates; these are determined by market dynamics.

The issuance of iTokens is accompanied by the creation of a liquidity pool for the iToken and its underlying asset. Market participation in these pools drives the effective interest rate.

For example, lending 10,000 USDC through IFICHI might offer a 5% interest rate for a one-year term, yielding approximately 10,500 iUSDC upon maturity.