Terminologies

Introduce the users to some of the terminologies in the port finance

For each assets that Port Finance supports, it has the following parameters:

  • Loan to Value Ratio: the max ratio between loan to collateral that the users are allowed to borrow

  • Liquidation Threshold: the ratio between loan to collateral at which the collateral can be bought by liquidator at a discount

  • Liquidation Bonus: the discount at which the liquidator can come in and buy the collateral

  • Borrow Fee: the fee that is changed to the protocol

  • Flash Loan Fee: the fee percentage that is charged for flash loan

For each wallet they have the following statistics:

  • Total borrowing power: the total monetary value in USD that the users are allowed to borrowed

  • Risk factor: represents the safety of the your deposited asset against borrowed assets, the higher the risk factor the riskier is your loan. When the risk factor reaches 100%, your loan will be liquidated.

  • Loan to Value ratio: the ratio of how much users have borrowed compared to their deposited asset

Concretely, the above statistics are calculated as followed:

TotalBorrowPower=Ī£collateralLTVcollateralāˆ—MarketValuecollateralTotal BorrowPower = \Sigma_{collateral} LTV_{collateral} * MarketValue_{collateral}

RiskFactor=Ī£borrowMarketValueborrowĪ£collateralLiquidationThresholdcollateralāˆ—MarketValuecollateralRiskFactor = \frac{ \Sigma_{borrow} MarketValue_{borrow}}{ \Sigma_{collateral} LiquidationThreshold_{collateral} * MarketValue_{collateral}}

LTV=Ī£borrowMarketValueborrowĪ£collateralLTVcollateralāˆ—MarketValuecollateralLTV = \frac{\Sigma_{borrow} MarketValue_{borrow}}{\Sigma_{collateral} LTV_{collateral} * MarketValue_{collateral}}

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