Borrowing configuration
Following parameters form the risk management framework within the Weft protocol, ensuring that borrowing and collateralization activities are managed safely and efficiently.
Global Configuration
The table below outlines the key global parameters used within the Weft protocol, including their descriptions and current values.
| Parameter | Description | Current Value |
|---|---|---|
| MaxCdpPosition | To avoid "state bomb" where transaction fees become too high due to excessive state loading, the maximum number of positions allowed in a Wefty is limited. | 8 |
| maxNftCollateralLoanPositions | NFT Liquidation is more expensive than Fungible Liquidation. This parameter defines the maximum number of loan positions allowed in a CDP with NFT as collateral to prevent state boom during NFT liquidation | 2 |
| PriceExpirationPeriod | The duration (in seconds) for which a fetched asset price remains valid. This represents the maximum accepted keep-alive period from price feeds. | 14400 (4 hours) |
| PriceCacheMode | Price data from Oracles is cached to save on transaction fees. The two caching modes are: Hash (cached per transaction) and Debounce (cached within a period). | Debounce 900 (15 minutes) |
| MaxClaimNftValue | Maximum value of an unstaking Claim NFT allowed in a CDP | 1,000,000 XRD |
LTV and Liquidation Threshold
These parameters determine when a collateral asset is considered sufficient to cover a loan or when it becomes eligible for liquidation:
- Max Loan-To-Value Ratio: The highest percentage of a collateral's value that can be used to secure loans.
- Liquidation Threshold: The LTV level at which the collateral is deemed under-secured, triggering potential liquidation.
- Liquidation Bonus Rate: The additional percentage given to liquidators as a reward for liquidating an under-collateralized position.
| ID | Description | Max Loan-To-Value Ratio | Liquidation Threshold | Liquidation Bonus Rate | Associated Resources |
|---|---|---|---|---|---|
| O | XRD derivatives | 0.75 | 0.80 | 7% | XRD (With All LSU), LSULP |
| 1 | Bridged Volatile Asset | 0.75 | 0.80 | 7% | xwBTC, xETH |
| 2 | Bridged Stable Asset | 0.65 | 0.70 | 7% | xUSDC, xUSDT |
| 3 | dApp Utility Tokens | 0.25 | 0.35 | 10% | (TBD) |
| 4 | Meme Coins | 0.20 | 0.30 | 10% | (TBD) |
| 5 | Default Efficiency Config | 0.95 | 0.96 | 3% | (Same resources in the pair) |
| 6 | Default Correlation Group | 0.9 | 0.92 | 5% | (Use for all efficiency groups) |
Correlation Groups
Groups of assets that are closely related, enabling more favorable borrowing terms under certain conditions. Each correlation group is linked to an LTV and liquidation configuration.
| ID | Description | LTV Config ID | Associated Resources |
|---|---|---|---|
| 0 | XRD/LSU and XRD derivatives | 6 (Default Correlation Group Efficiency) | XRD (With All LSU), LSULP |
| 1 | USD Stable Coins | 6 (Default Correlation Group Efficiency) | xUSDC, xUSDT |
Loan Resource Config
This configuration defines the borrowing terms for different assets:
- loanCloseFactor: The maximum portion of a loan that can be repaid during a liquidation process.
- loanValueFactor: A multiplier used to adjust the impact of a loan position, potentially increasing its weight to address certain risk factors.
| ID | Description | loanCloseFactor | loanValueFactor | Associated Resources |
|---|---|---|---|---|
| O | Default | 0.5 | 1 | XRD, xUSDC, xUSDT, xETH, xwBTC |