# 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.&#x20;

## Risk Parameters

### BSC Lending Pool

<table data-header-hidden><thead><tr><th width="150">Reserve</th><th width="150" align="center">Collateral</th><th width="150">LTV</th><th width="150" align="center">Threshold</th><th width="150" align="center">Bonus</th><th align="center">Reserve Factor</th></tr></thead><tbody><tr><td><strong>Reserve</strong></td><td align="center"><strong>Collateral</strong></td><td><strong>LTV</strong></td><td align="center"><strong>Threshold</strong></td><td align="center"><strong>Bonus</strong></td><td align="center"><strong>Reserve Factor</strong></td></tr><tr><td>DAI</td><td align="center">Yes</td><td>77%</td><td align="center">80%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>USDC</td><td align="center">Yes</td><td>80%</td><td align="center">85%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>USDT</td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>ETH</td><td align="center">Yes</td><td>82,5%</td><td align="center">85%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>BNB</td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>BTCB</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">9%</td><td align="center">20%</td></tr><tr><td>BUSD</td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>AAVE</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>ADA</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">5%</td><td align="center">15%</td></tr><tr><td>CAKE</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>XRP</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>DOGE</td><td align="center">Yes</td><td>55%</td><td align="center">60%</td><td align="center">8%</td><td align="center">20%</td></tr><tr><td>DOT</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>XVS     </td><td align="center">Yes</td><td>60%</td><td align="center">65%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>FTM     </td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">20%</td></tr></tbody></table>

### **FTM** Lending Pool

<table data-header-hidden><thead><tr><th width="150">Reserve</th><th width="150" align="center">Collateral</th><th width="150">LTV</th><th width="150" align="center">Threshold</th><th width="150" align="center">Bonus</th><th align="center">Reserve Factor</th></tr></thead><tbody><tr><td><strong>Reserve</strong></td><td align="center"><strong>Collateral</strong></td><td><strong>LTV</strong></td><td align="center"><strong>Threshold</strong></td><td align="center"><strong>Bonus</strong></td><td align="center"><strong>Reserve Factor</strong></td></tr><tr><td>DAI</td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">10%</td></tr><tr><td>USDC</td><td align="center">Yes</td><td>80%</td><td align="center">85%</td><td align="center">5%</td><td align="center">10%</td></tr><tr><td>USDT</td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">10%</td></tr><tr><td>ETH</td><td align="center">Yes</td><td>80%</td><td align="center">82.5%</td><td align="center">5%</td><td align="center">10%</td></tr><tr><td>BTC</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">9%</td><td align="center">20%</td></tr><tr><td>FTM     </td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">20%</td></tr></tbody></table>

### ETH Lending Pool

<table data-header-hidden><thead><tr><th width="150">Reserve</th><th width="150" align="center">Collateral</th><th width="150">LTV</th><th width="150" align="center">Threshold</th><th width="150" align="center">Bonus</th><th align="center">Reserve Factor</th></tr></thead><tbody><tr><td><strong>Reserve</strong></td><td align="center"><strong>Collateral</strong></td><td><strong>LTV</strong></td><td align="center"><strong>Threshold</strong></td><td align="center"><strong>Bonus</strong></td><td align="center"><strong>Reserve Factor</strong></td></tr><tr><td>DAI</td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>USDC</td><td align="center">Yes</td><td>80%</td><td align="center">85%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>USDT</td><td align="center">Yes</td><td>75%</td><td align="center">80%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>ETH</td><td align="center">Yes</td><td>80%</td><td align="center">82.5%</td><td align="center">5%</td><td align="center">20%</td></tr><tr><td>BTC</td><td align="center">Yes</td><td>70%</td><td align="center">75%</td><td align="center">9%</td><td align="center">20%</td></tr></tbody></table>

## **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.

<table data-header-hidden><thead><tr><th width="150">Name</th><th width="150">Symbol</th><th width="150" align="center">Price updated every</th><th>Address</th></tr></thead><tbody><tr><td><strong>Name</strong></td><td><strong>Symbol</strong></td><td align="center"><strong>Price updated every</strong></td><td><strong>Address</strong></td></tr><tr><td>Binance USD</td><td>BUSD</td><td align="center">0.5%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/busd-usd">https://data.chain.link/bsc/mainnet/crypto-usd/busd-usd</a></td></tr><tr><td>DAI</td><td>DAI</td><td align="center">2%</td><td><a href="https://feeds.chain.link/dai-eth">https://feeds.chain.link/dai-usd</a></td></tr><tr><td>USDC</td><td>USDC</td><td align="center">0.1%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/usdc-usd">https://data.chain.link/bsc/mainnet/crypto-usd/usdc-usd</a></td></tr><tr><td>Tether</td><td>USDT</td><td align="center">0.1%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/usdt-usd">https://data.chain.link/bsc/mainnet/crypto-usd/usdt-usd</a></td></tr><tr><td>Ethereum</td><td>ETH</td><td align="center">0.1%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/eth-usd">https://data.chain.link/bsc/mainnet/crypto-usd/eth-usd</a></td></tr><tr><td>Binance coin</td><td>BNB</td><td align="center">1%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/bnb-usd">https://data.chain.link/bsc/mainnet/crypto-usd/bnb-usd</a></td></tr><tr><td>BTCB</td><td>BTCB</td><td align="center">0.1%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/btc-usd">https://data.chain.link/bsc/mainnet/crypto-usd/btc-usd</a></td></tr><tr><td>AAVE</td><td>AAVE</td><td align="center">0.2%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/aave-usd">https://data.chain.link/bsc/mainnet/crypto-usd/aave-usd</a></td></tr><tr><td>ADA</td><td>ADA</td><td align="center">1%</td><td><a href="https://feeds.chain.link/ada-usd">https://feeds.chain.link/ada-usd</a></td></tr><tr><td>CAKE</td><td>CAKE</td><td align="center">0.2%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/cake-usd">https://data.chain.link/bsc/mainnet/crypto-usd/cake-usd</a></td></tr><tr><td>XRP</td><td>XRP </td><td align="center">0.2%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/xrp-usd">https://data.chain.link/bsc/mainnet/crypto-usd/xrp-usd</a></td></tr><tr><td>DOGE</td><td>DOGE</td><td align="center">0.2%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/doge-usd">https://data.chain.link/bsc/mainnet/crypto-usd/doge-usd</a></td></tr><tr><td>DOT  </td><td>DOT</td><td align="center">0.2%</td><td>h<a href="https://data.chain.link/bsc/mainnet/crypto-usd/dot-usd">ttps://data.chain.link/bsc/mainnet/crypto-usd/dot-usd</a></td></tr><tr><td>XVS</td><td>XVS</td><td align="center">0.3%</td><td><a href="https://data.chain.link/bsc/mainnet/crypto-usd/xvs-usd">https://data.chain.link/bsc/mainnet/crypto-usd/xvs-usd</a></td></tr><tr><td>FTM</td><td>FTM</td><td align="center">0.5%</td><td><a href="https://data.chain.link/fantom/mainnet/crypto-usd/ftm-usd">https://data.chain.link/fantom/mainnet/crypto-usd/ftm-usd</a></td></tr></tbody></table>