Strobe Protocol
  • Introduction
  • Terminology
  • Products
  • Money market
    • Rationale
    • User guide
    • Architecture
      • Deposit and repayment
      • Withdrawal and borrowing
      • Liquidation
      • EVM Sidechain lending internals
    • Interest rate strategies
      • Interest rate strategy 1
    • Asset parameters
      • Definitions
      • Values
    • Overcollateralization and collateralization ratio
    • Health factor and liquidation
    • Oracle
    • Axelar
      • General message passing
      • Failure conditions and solutions
    • Risks
    • FAQ
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On this page
  • Loan-to-value (LTV) ratio
  • Liquidation threshold
  • Reserve factor
  • Supply and borrow caps
  • Supply cap
  • Borrow cap
  • Liquidation bonus
  • Interest rate strategy contract address
  • More relevant concepts
  1. Money market
  2. Asset parameters

Definitions

Loan-to-value (LTV) ratio

The LTV ratio determines how much a user can borrow against their collateral. For example, if the LTV ratio for XRP is 75%, a user can borrow up to 75% of the value of their XRP supply position.

Generally speaking, the more stable an asset's price is, the higher the LTV ratio would be.

Liquidation threshold

The liquidation threshold determines the maximum percentage of value that can be borrowed against it. For example, if you supply $10,000 in XRP with an 80% liquidation threshold, and the liquidation threshold in USD will be $8000. Then if you happen to have a debt of $8,000 in axlUSDC, any more decline of XRP in USD or increase in the debt of axlUSDC in USD will lead to liquidation.

Reserve factor

This is the percentage of the interests paid by the borrowers that the protocol takes as a revenue.

For example, if a borrower repays $30 of interest back to the protocol at 10% reserve ratio, the protocol takes $3 as a revenue, and forward $27 as deposit interests for all depositors.

Supply and borrow caps

Caps encourage a balanced distribution of supplied and borrowed assets across multiple tokens, reducing over-reliance on a single asset.

Supply cap

Supply cap limits the total amount of deposit of a certain assets that Strobe can take, effectively limiting its total exposure and overall risk.

Borrow cap

A borrow cap ensures that the protocol always retains enough reserves to meet lender withdrawals and prevent excessive debt accumulation.

Liquidation bonus

The liquidation bonus or liquidation penalty is a percentage of the collateral that is taken away from an underwater account to a liquidator upon successful liquidation.

For example, if $10 of debt in XRP is being repaid by a liquidator, and the liquidator intends to take away collateral in axlUSDC from the bad debtor at 10% of liquiation bonus, the liquidator will be able to take away $10 + $1 = $11 in axlUSDC from the bad debtor.

Interest rate strategy contract address

More relevant concepts

More relevant concepts are covered extensively in Health factor and liquidation.

PreviousAsset parametersNextValues

Last updated 1 month ago

For each asset, an interest rate strategy contract will be deployed. Each contract will have .

different interest rate strategy parameters