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Risks to Lenders
Loss of Capital:
Risk: the risk of debt accrued by underwater positions in case liquidators do not liquidate in time during a period of high market volatility.
Mitigation: we have taken a cautious approach in setting key parameters to ensure a large buffer. We also have provided enough incentive to liquidators to call and liquidate applicable positions. Hence, we believe this risk scenario is very unlikely to occur.
Timing of Asset Return:
Risk: delay in getting deposited asset back in case of the pool’s high level of utilization. Please note that farmers can borrow the funds as long as they like and there is no fixed term for when the funds must be returned.
Mitigation: we use a triple-slope interest rate to optimize for 90% fund utilization. The steep increase in interest rate beyond the 90% utilization(lending fees scaling from 10-100%) should incentivize more lenders to deposit funds and borrowers to return outstanding loans, optimizing the pool to stay at a flexible level below ~90%.
Loss of Capital:
Risk: the risk of debt accrued by underwater positions in case liquidators do not liquidate in time during a period of high market volatility.
Mitigation: we have taken a cautious approach in setting key parameters to ensure a large buffer. We also have provided enough incentive to liquidators to call and liquidate applicable positions. Hence, we believe this risk scenario is very unlikely to occur.
Timing of Asset Return:
Risk: delay in getting deposited asset back in case of the pool’s high level of utilization. Please note that farmers can borrow the funds as long as they like and there is no fixed term for when the funds must be returned.
Mitigation: we use a triple-slope interest rate to optimize for 90% fund utilization. The steep increase in interest rate beyond the 90% utilization(lending fees scaling from 10-100%) should incentivize more lenders to deposit funds and borrowers to return outstanding loans, optimizing the pool to stay at a flexible level below ~90%.
). Ich habe so ziemlich alle meine BNBs im Vault und meine Avg Balance ist schon ein gutes Stueck niedriger jetzt, obwohl meine BNBs sich die letzten 30-Tage so gut wie nicht geaendert haben.
