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  1. Protocol

Parameters

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Last updated 2 years ago

Liabilities (L) Sum of all loans for a particular asset issued on the platform.

Available Assets (A) Amount of assets available in the system by each pool.

Reserve size (R) R = L + A

Scarcity Ratio (S) Ratio of asset-specific liabilities relative to asset-specific deposits

Scarcity Rate Target (ST) Protocol adjusted parameter (current 75%). A conservative target for scarcity in the system. Once S increases beyond this target, the character of the curve changes. The borrow rate increases drastically to incentivize additional deposits while also discouraging additional borrowing. ST can be set by an external ‘oracle’ or parameter.

Base Rate (r0) Protocol adjusted parameter (currently 0.4% for each asset pool). The minimum interest rate charged to borrowers.

Rate Growth Factor (g) Protocol adjusted parameter. A factor correlated to borrow rates above ST. The larger this value, the stronger the incentives to decrease toward ST.

Safe Borrow Rate Max (rm) Protocol adjusted parameter (4%). Upper bound of variable-rate loan prior to breaching ST, rm can be set by an external ‘oracle’ or parameter.

Stable Rate Premium (sp) Protocol adjusted parameter (current 3%). Flat-rate premium charged for stable-rate loans.

Liquidation Penalty Pliq The fee associated with a protocol-enforced liquidation of user collateral. The fees are used to offset gas cost and slippage. Any remaining fees are distributed to the ecosystem in the form of yield.

Principle Balance - USD derived value of user collateral/debt by sum the multiplication of the assets quantity per their oracle given prices. These balances aimed to facilitate the calculations of the core parameters of the protocol and help to easily understand for the user his positions.

C-Ratio - parameter that adjust user deposit value to the amount of loan he is able to take.

Minimum C-Ratio - depends on the collateral type and market situation. The borrow can not be more than the collateral value multiplied by C-Ratio parameter for particular asset (MC parameter, for stables it is 95% and for example ETH/WETH/BTC/WBTC - it is 70%):