The interest rate in Parallel finance is dynamically determined by the supply and demand. Therefore, the borrow and supply interests could vary in different blocks.
1. Exchange Rate
When a supplier deposits an asset to the money market, a certain amount of pTokens will be issued based on the initial exchange rate. The supplier earns interest through the appreciation of pToken's exchange rate.
Parallel finance converts a certain portion of borrow interests into reserves. These reserves may be used for incentives, liquidation protection, emergencies, etc.