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:

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%	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%

FTM Lending Pool

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%

ETH Lending Pool

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%

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%

https://data.chain.link/bsc/mainnet/crypto-usd/busd-usd

DAI

https://feeds.chain.link/dai-usd

USDC

0.1%