Risk parameters
Last updated
Last updated
The maximum amount that can be borrowed for a specific mortgage is determined by the Loan To Value (LTV) ratio. For example, if the LTV is 75%, borrowers will be allowed to borrow 0.75 ETH worth of corresponding currency for every 1 ETH worth of collateral.
For a wallet, the maximum LTV is calculated as the weighted average of LTVs of collateral assets and their value. In particular, for a wallet that deposits the collateral assets that are worth in dollars , and their LTVs corresponding to , maximum LTV is
The liquidation threshold is the percentage at which a position is defined as undercollateralised. For example, a Liquidation threshold of 80% means that if the value rises above 80% of the collateral, the position is undercollateralised and could be liquidated.
The difference between the Loan To Value and the Liquidation Threshold is a safety cushion for borrowers.
For each wallet, the liquidation threshold is calculated as the weighted average of the liquidation thresholds of the collateral assets and their value. In particular, for a wallet that deposits the collateral assets that are worth in dollars , and their liquidation threshold, respectively, , the liquidation thresholds of wallet is
For a wallet, these risk parameters enable the calculation of the health factor:
Liquidation penalty is a bonus applied to the price of collateral assets purchased by liquidators as part of the liquidation of a loan that has reached the liquidation threshold.
The reserve factor allocates a share of the protocol's interests to a collector contract as reserve for the ecosystem.
Reserve
Collateral
LTV
Threshold
Bonus
Reserve Factor
DAI
Yes
77%
80%
5%
15%
USDC
Yes
80%
85%
5%
15%
USDT
Yes
75%
80%
5%
15%
ETH
Yes
82,5%
85%
5%
15%
BNB
Yes
75%
80%
5%
15%
BTCB
Yes
70%
75%
9%
20%
BUSD
Yes
75%
80%
5%
15%
AAVE
Yes
70%
75%
5%
15%
ADA
Yes
70%
75%
5%
15%
CAKE
Yes
70%
75%
5%
20%
XRP
Yes
70%
75%
5%
20%
DOGE
Yes
55%
60%
8%
20%
DOT
Yes
70%
75%
5%
20%
XVS
Yes
60%
65%
5%
20%
FTM
Yes
75%
80%
5%
20%
Reserve
Collateral
LTV
Threshold
Bonus
Reserve Factor
DAI
Yes
75%
80%
5%
10%
USDC
Yes
80%
85%
5%
10%
USDT
Yes
75%
80%
5%
10%
ETH
Yes
80%
82.5%
5%
10%
BTC
Yes
70%
75%
9%
20%
FTM
Yes
75%
80%
5%
20%
Reserve
Collateral
LTV
Threshold
Bonus
Reserve Factor
DAI
Yes
75%
80%
5%
20%
USDC
Yes
80%
85%
5%
20%
USDT
Yes
75%
80%
5%
20%
ETH
Yes
80%
82.5%
5%
20%
BTC
Yes
70%
75%
9%
20%
The frequency of price updates is determined by the liquidation strategy. We use a margin method, which means that prices are refreshed whenever the deviation exceeds a certain threshold. For the price feed, we rely on Chainlink's decentralized oracles.
Name
Symbol
Price updated every
Address
Binance USD
BUSD
0.5%
DAI
DAI
2%
USDC
USDC
0.1%
Tether
USDT
0.1%
Ethereum
ETH
0.1%
Binance coin
BNB
1%
BTCB
BTCB
0.1%
AAVE
AAVE
0.2%
ADA
ADA
1%
CAKE
CAKE
0.2%
XRP
XRP
0.2%
DOGE
DOGE
0.2%
DOT
DOT
0.2%
XVS
XVS
0.3%
FTM
FTM
0.5%
where is total borrows (in dollars), is the values (in dollars) of collateral assets, and is their liquidation threshold, respectively. When the loan may be liquidated to maintain solvency.
h