Each asset in the Agora protocol has specific values related to their risk, which influences how they are supplied and borrowed.
| Name | Symbol | Collateral | Collateral Factor | Liquidation Bonus | Reserve Factor |
|---|---|---|---|---|---|
| Stablecoins | |||||
| Metis USDC | m.USDC | Yes | 90% | 5% | 90%*** |
| Metis USDT | m.USDT | Yes | 90% | 5% | 10% |
| USDO | USDO | No | 0% | 5% | 10% |
| DAI | DAI | Yes | 50%* | 5% | 10% |
| Other Assets | |||||
| Metis | METIS | Yes | 70% | 5% | 10% |
| Ethereum | WETH | Yes | 75% | 5% | 10% |
| Netswap | NETT | Yes | 65% | 5% | 20% |
| Tethys | TETHYS | No | 0% | 5% | 20% |
| Wrapped Bitcoin | WBTC | Yes | 40%* | 5% | 10% |
| Starstream | STARS | Yes | 0%* | 5% | 20% |
| Agora DeFi | AGORA | Yes** | 0%* | NA | NA |
Updated 08/04/2022
The risk parameters allow to mitigate market risks of the currencies supported by the protocol. Each borrowing is guaranteed by a collateral that may be subject to volatility. Sufficient margin and incentives are needed for the position to remain collateralised in adverse market conditions. If the value of the collateral falls bellow a threshold, part of it is auctioned to repay part of the position and keep the ongoing borrowing collateralised.
The Collateral Factor, also known as the Loan to Value (LTV) ratio defines the maximum amount of currency that can be borrowed with a specific collateral. It’s expressed in percentage: at CF=65%, for every 1 Metis worth of collateral, borrowers will be able to borrow 0.65 Metis worth of the corresponding currency. Once a borrow is taken, the CF evolves with market conditions.
Bonus on the price of assets of the collateral when liquidators purchase it as part of the liquidation of a loan that has passed the liquidation threshold. Currently set at 5%.
Your collateral is at risk of liquidation when your borrow limit it reaches 100%.
The reserve factor allocates a share of the protocol's interests to a collector contract as reserve for the ecosystem. For instance, a 10% reserve factor means the protocol receives 10% of the borrowers APY as fees when they make a repayment. For example: a $100K borrow of USDC for a year, at 10% borrow APY, would result in $10,000 * 0.1 = $1,000 reserve fees for the protocol upon repayment.
Market risks have the most direct impact on the risk parameters:
Liquidity
The liquidity is based on the volume on the markets, which is key for the liquidation process. This can be mitigated through the liquidation parameters: the lower the liquidity, the higher the incentives.
Volatility