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
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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=ΣcollateralLTVcollateral∗MarketValuecollateralTotal BorrowPower
 = \Sigma_{collateral} LTV_{collateral} * MarketValue_{collateral}TotalBorrowPower=Σcollateral​LTVcollateral​∗MarketValuecollateral​
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RiskFactor=ΣborrowMarketValueborrowΣcollateralLiquidationThresholdcollateral∗MarketValuecollateralRiskFactor = \frac{ \Sigma_{borrow}  MarketValue_{borrow}}{ \Sigma_{collateral} LiquidationThreshold_{collateral} * MarketValue_{collateral}}
RiskFactor=Σcollateral​LiquidationThresholdcollateral​∗MarketValuecollateral​Σborrow​MarketValueborrow​​
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LTV=ΣborrowMarketValueborrowΣcollateralLTVcollateral∗MarketValuecollateralLTV = \frac{\Sigma_{borrow}  MarketValue_{borrow}}{\Sigma_{collateral} LTV_{collateral} * MarketValue_{collateral}}
LTV=Σcollateral​LTVcollateral​∗MarketValuecollateral​Σborrow​MarketValueborrow​​
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Borrow
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Protocol Math
Last modified 1yr ago