Key terms

The terms of a Term Repo arrangement are configurable and set by the deployer. Key terms with descriptions and examples are set forth in the table below.

TermSet ByDescriptionExample

Deployer

Refers to the ERC-20 token in which a Term Repo loan is denominated

USDC

Deployer

Refers to the ERC -20 token(s) eligible to be posted as collateral

WETH

User

Refers to the principal amount borrowed or lent (denominated in Purchase Tokens)

1,250,000 USDC

Term Auction

An annualized interest rate that is applied to the Purchase Price to determined the Repurchase Price due at maturity

3.5%

Term Auction

The amount due at maturity/on the Repurchase Date from a borrower to a Term Repo

1,253,160 USDC

Deployer

The date (and time) on which a loan is due/Term Repo matures

4 weeks

Deployer

The amount of time after the Repurchase Date that a borrower has to repurchase their collateral before it is liquidated (typically 24 hours)

24 hours

Deployer

The ratio of the market value of collateral posted to the purchase price received by a borrower that is required to open a borrow position

150%

Deployer

The ratio of the market value of collateral posted to the repurchase price owed by a borrower to avoid liquidation

125%

Deployer

The price oracle feed by which borrower collateral is marked to market (updated every hour OR if price movement exceeds a threshold, e.g. 0.5%)

Deployer

A servicing fee, quoted at an annualized rate, applied on a borrower’s principal loan amount for servicing a Term Repo

0.5%

Deployer

Anytime collateral is liquidated, the defaulting borrower is charged liquidated damages assessed as a percent of debt that was covered in liquidation. This goes in part to incentivize liquidators and in part to the Protocol

8.0% (2.8% of which goes to protocol, see below)

Deployer

The portion of liquidated damages that accrues to the Protocol

2.8%

Deployer

To protect the borrower against excessive liquidation, liquidations cannot exceed the minimum amount necessary to bring a borrower back to the initial margin ratio, except in the case borrower’s collateral value net of his or her repurchase obligation is at or below the de minimis threshold

$500

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