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Linear Rate Policy

The Linear Rate Policy implements a simple linear auction rate curve with one kink point. It extends the Morpho V2 To Morpho V2 Policy base contract.

Rate Curve​

Linear policy

The rate starts at 0% when the auction begins and increases linearly until it reaches the kink point, where it plateaus at the user's maxRate for the remainder of the auction period.

How It Works​

1. Set Policy Parameters​

The policy owner (via timelock) can configure:

  • kink: Percentage of auction duration where rate reaches maximum (max 100%)
  • fee: Percentage fee charged based on duration between terms (max 100% APR)
  • feeRecipient: Address that receives fees from rolls

2. Rate Calculation​

During a roll, getRate() calculates the auction rate based on elapsed time:

  • Before kink: Rate increases linearly from 0% to maxRate
  • After kink: Rate remains at maxRate until maturity
  • At maturity: Rate equals maxRate

The roller contract compares this rate with the user's maxRate and uses the lower value.

3. Fee Execution​

The policy charges fees based on the duration between source and target terms:

  • beforeRoll: Calculates fee, snapshots fee recipient balance, returns borrowedAmount = repaidDebt + feeAmount
  • afterRoll: Validates that the fee recipient received the expected fee amount