Risk parameters

Last updated 2 years ago

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Risk parameters

Loan To Value

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 $C_1, \dots ,C_n$ , and their LTVs corresponding to $LTV_1, \dots , LTV_n$ , maximum LTV is

\frac{C_1 \times LTV_1 + \cdots + C_n \times LTV_n }{C_1+\cdots+C_n}

Liquidation Threshold

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 $C_1, \dots ,C_n$ , and their liquidation threshold, respectively, $LT_1, \dots, LT_n$ , the liquidation thresholds of wallet is

\frac{C_1 \times LT_1 + \cdots + C_n \times LT_n}{C_1 + \cdots + C_n}

Health Factor

For a wallet, these risk parameters enable the calculation of the health factor:

Liquidation penalty

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.

Reserve Factor

The reserve factor allocates a share of the protocol's interests to a collector contract as reserve for the ecosystem.

Risk Parameters

BSC Lending Pool

Reserve

Collateral

LTV

Threshold

Bonus

Reserve Factor

DAI

Yes

77%

80%

15%

USDC

Yes

80%

85%

15%

USDT

Yes

75%

80%

15%

ETH

Yes

82,5%

85%

15%

BNB

Yes

75%

80%

15%

BTCB

Yes

70%

75%

20%

BUSD

Yes

75%

80%

15%

AAVE

Yes

70%

75%

15%

ADA

Yes

70%

75%

15%

CAKE

Yes

70%

75%

20%

XRP

Yes

70%

75%

20%

DOGE

Yes

55%

60%

20%

DOT

Yes

70%

75%

20%

XVS

Yes

60%

65%

20%

FTM

Yes

75%

80%

20%

FTM Lending Pool

Reserve

Collateral

LTV

Threshold

Bonus

Reserve Factor

DAI

Yes

75%

80%

10%

USDC

Yes

80%

85%

10%

USDT

Yes

75%

80%

10%

ETH

Yes

80%

82.5%

10%

BTC

Yes

70%

75%

20%

FTM

Yes

75%

80%

20%

ETH Lending Pool

Reserve

Collateral

LTV

Threshold

Bonus

Reserve Factor

DAI

Yes

75%

80%

20%

USDC

Yes

80%

85%

20%

USDT

Yes

75%

80%

20%

ETH

Yes

80%

82.5%

20%

BTC

Yes

70%

75%

20%

Price Discovery

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

USDC

0.1%

Tether

USDT

0.1%

Ethereum

ETH

0.1%

Binance coin

BNB

BTCB

0.1%

AAVE

0.2%

ADA

CAKE

0.2%

XRP

0.2%

DOGE

0.2%

DOT

0.2%

XVS

0.3%

FTM

0.5%

PreviousInterest Rate Strategy

Last updated 2 years ago

Was this helpful?

Loan To Value

\frac{C_1 \times LTV_1 + \cdots + C_n \times LTV_n }{C_1+\cdots+C_n}

Liquidation Threshold

The difference between the Loan To Value and the Liquidation Threshold is a safety cushion for borrowers.

\frac{C_1 \times LT_1 + \cdots + C_n \times LT_n}{C_1 + \cdots + C_n}

Health Factor

For a wallet, these risk parameters enable the calculation of the health factor:

H_f = \frac{C_1 \times LT_1+ \cdots + C_n \times LT_n}{B}

where $B$ is total borrows (in dollars), $C_1,\dots,C_n$ is the values (in dollars) of collateral assets, and $LT_1, \dots, LT_n$ is their liquidation threshold, respectively. When $H_f < 1$ the loan may be liquidated to maintain solvency.

Liquidation penalty

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.

Reserve Factor

The reserve factor allocates a share of the protocol's interests to a collector contract as reserve for the ecosystem.

Risk Parameters

BSC Lending Pool

Reserve

Collateral

LTV

Threshold

Bonus

Reserve Factor

DAI

Yes

77%

80%

15%

USDC

Yes

80%

85%

15%

USDT

Yes

75%

80%

15%

ETH

Yes

82,5%

85%

15%

BNB

Yes

75%

80%

15%

BTCB

Yes

70%

75%

20%

BUSD

Yes

75%

80%

15%

AAVE

Yes

70%

75%

15%

ADA

Yes

70%

75%

15%

CAKE

Yes

70%

75%

20%

XRP

Yes

70%

75%

20%

DOGE

Yes

55%

60%

20%

DOT

Yes

70%

75%

20%

XVS

Yes

60%

65%

20%

FTM

Yes

75%

80%

20%

FTM Lending Pool

Reserve

Collateral

LTV

Threshold

Bonus

Reserve Factor

DAI

Yes

75%

80%

10%

USDC

Yes

80%

85%

10%

USDT

Yes

75%

80%

10%

ETH

Yes

80%

82.5%

10%

BTC

Yes

70%

75%

20%

FTM

Yes

75%

80%

20%

ETH Lending Pool

Reserve

Collateral

LTV

Threshold

Bonus

Reserve Factor

DAI

Yes

75%

80%

20%

USDC

Yes

80%

85%

20%

USDT

Yes

75%

80%

20%

ETH

Yes

80%

82.5%

20%

BTC

Yes

70%

75%

20%

Price Discovery

Name

Symbol

Price updated every

Address

Binance USD

BUSD

0.5%

DAI

USDC

0.1%

Tether

USDT

0.1%

Ethereum

ETH

0.1%

Binance coin

BNB

BTCB

0.1%

AAVE

0.2%

ADA

CAKE

0.2%

XRP

0.2%

DOGE

0.2%

DOT

0.2%

XVS

0.3%

FTM

0.5%

H_f = \frac{C_1 \times LT_1+ \cdots + C_n \times LT_n}{B}