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.
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 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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