AssetDesk Pools

At the heart of a lending pool is the concept of: every pool holds reserves in multiple assets, with the total amount in USD defined as total liquidity. A collateral accepts deposits from lenders. Users can borrow these funds, granted that they lock a greater value as collateral, which backs the borrow position. Specific assets in the pool can be configured as collateral or not for borrow positions, only low risk tokens should be considered. The amount one can borrow depends on the assets deposited still available in the reserves of the pool. Every has a specific Collateral Ratio, calculated as the weighted average of the different LTVs of the currencies composing the collateral, where the weight for each LTV is the equivalent amount of the collateral in USDC;

Every borrow position can be opened with a stable or variable rate. Borrows have infinite duration, and there is no repayment schedule: partial or full repayments can be made anytime.

In case of price fluctuations, a borrow position might be liquidated. A liquidation event happens when the price of the collateral drops below the threshold, LQ, called liquidation threshold. Reaching this ratio channels a liquidation bonus, which incentivizes liquidators to buy the collateral at a discounted price. Every reserve has a specific liquidation threshold, following the same approach as for the LTV. Calculation of the average liquidation threshold L a Q is performed dynamically, using the weighted average of the liquidation thresholds of the collateral’s underlying assets.