Interest Accrual

Interest on K2 accrues continuously and automatically, no manual claiming required for standard supply or borrow interest.

• For Supplied Assets (Lenders): Interest earned is added directly to your supplied balance over time. Your supplied amount grows automatically based on the current supply APY (determined by market utilization: higher demand → higher rates). This means the total amount you can withdraw increases as interest accrues. No action needed; it's reflected in real-time on your dashboard.

• For Borrowed Assets (Borrowers): Interest owed is added directly to your borrowed balance over time. Your debt grows automatically based on the current borrow APY (typically higher than supply APY to account for protocol dynamics). This increases the total amount you must repay to close the position or maintain a healthy health factor. Monitor closely - accrued interest impacts your borrow limit and liquidation risk.

Interest rates are variable and adjust dynamically based on supply/demand in each market. Accrual happens per Soroban ledger (Stellar's equivalent to blocks), ensuring precise compounding without user intervention.

Incentives (Optional Rewards):

The only time you would need to claim anything is if a market receives additional incentives from partners (e.g., $XLM rewards to attract liquidity and make the market more attractive). These external rewards are not part of the core interest mechanism, they are separate tokens or assets distributed by the partner to boost participation. When active:

• Check the market details or dashboard for any " Distribution Rewards"

• Claim them manually via the app under the Rewards tab when available.

K2 itself does not currently issue or distribute a native token or base-layer rewards. Any incentives are fully managed by the partner adding them, and availability/amounts depend on their decisions.