# Parameters

Each reserve in a pool has these parameters that balance the supply & demand of the pool or govern the size of the loan you can take out (based on the quality and liquidity of the collateral asset). 

The critical thing to remember is the borrow APR changes based on utilization. Utilization is Tokens Borrowed / Tokens Supplied. At 0% utilization, there is excess supply and no demand, while at 100% there is excess demand but no supply.

| Parameter                | Value                                                         |
| ------------------------ | ------------------------------------------------------------- |
| Optimal utilization rate | Utilization where borrow APR starts to increase exponentially |
| Loan to value ratio      | Borrow X% against your collateral                             |
| Liquidation penalty      | % of your liquidated collateral to incentivize liquidators    |
| Liquidation threshold    | Account health that will trigger a liquidation                |
| Min borrow APR           | Borrow APR when Utilization = 0%                              |
| Optimal borrow APR       | Borrow APR when at optimal utilization                        |
| Max borrow APR           | Borrow APR when utilization = 100%                            |
| Borrow fee               | Origination fee Solend keeps when you borrow                  |
| Host fee percentage      | % of borrow fee kept by referral, UI or pool creator          |
| Deposit limit            | The cap of tokens that can be deposited into the pool         |
| Borrow limit             | The cap of tokens that can be borrowed into the pool          |