Interest Fees on Debt

Whenever you mint cUSD, you are essentially borrowing from the protocol, and interest will be charged on this debt.

Fees generated from interest serve as a source of revenue for the protocol and helps to maintain operations.

Interest accrues on outstanding debt over time and is added to the borrower's underlying debt balance.

While a borrower does not have to actively pay interest fees when they are accrued, interest does get added on as debt. This directly affects the collateral ratio and future borrowing interest that will be charged.