Important Parameters
The collateral factor of
collateral t
defines the maximum ratio of USP that can be borrowed, given the collateral value. This value should reflect the risk of the underlying token of the collateralized LP token, where a more stably priced token with less price risk should be allowed a higher ratio. It is denoted and with the interval set asThis variable can be configured from protocol governance.
The liquidation threshold of
collateral t
defines the percentage of which a position would be defined as under-collateralized and open to liquidation. This variable can be configured from protocol governance.
The collateral value of
token t
and address a
is calculated from the amount of LP token to be collateralized, factored by the coverage ratio: where the underlying token price is fetched from Chainlink.
The borrowing limit of
collateral t
of address a
is a calculated value that defines the maximum amount of USP to be borrowed. Please note that each address can only open one position per collateral type. Each position would contain precisely one collateral type.
The liquidation limit of
collateral t
of address a
is a calculated value that defines the upper boundary of borrowed USP amount. Positions with borrowed USP amounts greater than this limit will be flagged as open to liquidation.
The health factor of
collateral t
of address a
is the indicator of its collateralization level, calculated by the value of the borrowed USP and the liquidation limit of collateral. Users can use this to determine the risk of liquidation of a particular position. Health factors close to 1 are risky, and lower than 1 indicates the position can be liquidated.Please note that the borrowed USP amount includes the accrued stability fee over time.
Last modified 8mo ago