# Utilization

**Utilization Rate** measures how much of the available liquidity is actively engaged in lending. For instance, if a liquidity pool has $1 million in available funds and $700,000 is actively used, the Utilization Rate would be 70%.

In this case, pool utilization is calculated by dividing total borrow balance and total deposit balance of the Pool:

utilization = pool\_borrow\_balance / pool\_deposit\_balance;

Utilization is driving the borrow rate, so the bigger it is, bigger will the rates be.