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Parameters

There is an explanation of the following parameters in Model Parameters.

A. Reserve Factor

η=10%\begin{align*} \eta = 10\% \end{align*}
η\eta
is the fraction of the total Variable Rate Pool supply selected as Liquidity Reserve.

B. Treasury Fee

λr=0%\begin{align*} \lambda_r = 0\% \end{align*}
The treasury fee refers to the percentage of interest rate charges paid by borrowers that the protocol retains for its treasury.

C. Interest Rate Curves

Text
WETH
DAI
USDC
WBTC
wstETH
OP
Variable Rate Pools
AA
=
1.9362e-2
1.7852e-2
1.4844e-2
3.6184e-2
1.9362e-2
2.8487e-2
BB
=
-1.787e-3
-2.789e-3
1.9964e-4
-1.5925e-2
-1.787e-3
-5.8259e-3
UmaxU_{max}
=
1.003870947
1.003568501
1.002968978
1.007213882
1.003870947
1.005690787
Fixed Rate Pools
AA
=
3.8126e-1
3.9281e-1
3.9281e-1
3.697e-1
3.8126e-1
3.5815e-1
BB
=
-3.6375e-1
-3.7781e-1
-3.7781e-1
-3.497e-1
-3.6375e-1
-3.3564e-1
UmaxU_{max}
=
1.000010695
1.000014451
1.000014451
1.000007768
1.000010695
1.000005527
These parameters are utilized to calculate the effective borrow interest rate.

D. Risk Factors

Text
WETH
DAI
USDC
WBTC
wstETH
OP
hoho
(borrow/lend)
0.8400
0.9000
0.9100
0.8500
0.8200
0.3500
We associate a Risk-Adjust Factor to each asset to assess each collateral asset's borrow and lending power.

E. Variable Rate Pool Fee

δ=10%\begin{align*} \delta = 10\% \end{align*}
δ\delta
is the fraction of the fixed interest rate fees retained by the Variable Rate Pool upon leaving the Fixed Rate Pool.

F. Supply E.M.A. Parameters

βslow=0.0046\begin{align*} \beta_{slow} = 0.0046 \end{align*}
The time decay parameter is used when the supply is above average.
βfast=0.4000\begin{align*} \beta_{fast} = 0.4000 \end{align*}
The time decay parameter is used when the supply is below average.

G. Target Solvency Ratio

Γ=1.25\begin{align*} \Gamma = 1.25 \end{align*}
Target solvency ratio after liquidation.

H. Liquidation Bonuses

νliquidator=5.00%νbaddebt=0.25%\begin{align*} \nu_{liquidator} = 5.00\% \\ \nu_{bad-debt} = 0.25\% \end{align*}
During the liquidation process, the liquidator gets a commission fee, and the Variable Rate Pool receives a percentage of extra liquidation fees to compensate for potential bad debt residuals.

I. Extraordinary Earnings Distribution Factor

ξextearn=2.00\begin{align*} \xi_{extearn} = 2.00 \end{align*}

J. Penalty Rate

2.00%\begin{align*} 2.00\% \end{align*}
Daily penalty rate fee charged to fixed interest rate borrowers who didn't pay their loans before the maturity day.