# Utilization rate

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Each asset on the Apollo protocol has its own Utilization rate (U):

$$
U=TotalBorrows/TotalLiquidity
$$

* TotalBorrows - The total asset amount (in dollars) borrowed by the protocol users
* TotalLiquidity -  The total asset amount (in dollars) present on the protocol

The Utilization rate (U) monitors how much of an asset's reserves are borrowed in a given time frame (t).

As the U value approaches 100%, the asset becomes scarcer. If it reaches 100%, there is no more liquidity available for that asset. This situation poses a problem, as depositors run the risk of being unable to retrieve their assets from the protocol due to their unavailability.

Nevertheless, high U results in high returns for depositors. It's therefore essential to maximize utilization while protecting their liquidity.

Monitoring historical U rates is recommended, as it can assist in tracking emerging risks related to the liquidity shortage of a specific asset on the protocol.