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as of 01/04/2023
This section presents the dynamics of all the fundamental variables at the Money Market.
Most numbers are represented as a mantissa, an unsigned integer scaled by 1 * 10 ^ 18, to perform basic math at a high level of precision.
The cash represents the availability of Underlying in the Money Market. It is discretely updated at every of the following interactions: deposits, withdrawals, loans requests and loan repayments.
The Money Market total borrow dynamics is governed by the following differential equation:
Which can be translated to the following difference equation if we apply the explicit Euler discretization scheme:
Each Money Market tracks the total borrowed amount. However, each Smart Account must track the account’s borrowed amount. In that context, we can also track an Interest Rate Index given by:
With initial condition Notice that this index is just the dynamics of a borrow of one unit. This is what is usually called the Money Market equation. This index can be use to update any borrowed amount at time to any point in time such as:
In other words, the quotient among indexes define the well known discount factor:
such that:
Finally, notice that the borrows increase or decrease at specific time points depending on loans being taken or repaid. These two scenarios imply that the total borrows present discontinuities at such time points.
A fraction of the interest generated by the loans go to the Protocol Reserves. In this context, the Reserves are ruled by the following differential equation:
Finally, the supply rate is given by:
The protocol will implement an interest bearing token in order to distribute the accrue interest from borrowers among lenders (similar to Compound cTokens). The token will have an exchange rate with respect to the Money Market or pool underlying given by the following equation:
where
as of 17/06/2023
The Hatom Price Oracle is a sophisticated infrastructure comprising of Oracle Bots that push prices to a Price Aggregator Smart Contract (akin to the Chainlink oracle system). This contract subsequently renders these prices accessible on-chain, facilitating their usage by the Lending Price Oracle Smart Contract to ensure reliable pricing when users interact with the Lending Protocol.
These bots operate autonomously and are containerized, serving the purpose of submitting prices to the Price Aggregator Smart Contract. Each Bot possesses a unique private key, and the corresponding public key is granted Oracle status on the Price Aggregator Smart Contract whitelist, thereby permitting it to introduce new prices. Each Bot maintains a specific set of price providers that might intersect with those of other Bots. The Oracle Bots carry out two types of scheduled tasks: the "Heartbeat Task" and the "Threshold Task". The Heartbeat Task runs less frequently and operates according to a timeframe set by the round time of the Price Aggregator Smart Contract, ensuring regular price submissions. Conversely, the Threshold Task executes more frequently, retrieving prices from assigned sources (such as Binance, Cryptocompare, HitBTC, , Kraken, etc..), compares them to the previously submitted price, and resubmits the price if it exceeds a predefined threshold.
Its primary role is to compile price submissions from whitelisted Oracles. These Oracles are tasked with extracting prices from external sources like well-established exchanges and forwarding this data to the Price Aggregator. Upon reaching a certain number of submissions (which is fewer than the total number of Oracles), the Price Aggregator calculates a new median price and announces it. In a manner similar to Chainlink's price feeds, Oracles contribute prices in "rounds," which generally take place every half hour to one hour. However, if a sudden price change surpasses a predetermined "Threshold", Oracles are expected to resubmit a price, irrespective of the duration since the last submission.
The Hatom Oracle Smart Contract is responsible for supplying prices to the Controller Smart Contract, ensuring all assets can be represented in a common unit or currency (in this case, EGLD). To achieve this, the Oracle Smart Contract employs the following sources of information:
xExchange DEX Price Feeds, comprising the current price and the time-weighted average price (also known as the Safe Price) of the specific asset.
When a price is requested from the Hatom Oracle Smart Contract, it fetches the safe price from the xExchange DEX Price Feeds, and compares it to the price offered by the Price Aggregator Smart Contract. If the price difference falls within an acceptable range, the price from the Price Aggregator Smart Contract is deemed valid and relayed to the Controller Smart Contract. If the price difference exceeds a certain limit, the following occurs:
If the initial tolerance is Surpassed: The price is deemed invalid and the Hatom Oracle Smart Contract issues an event to alert the community that the first anchor tolerance has been exceeded. It then sends the most recent valid price to the Controller Smart Contract. A subsequent call to the Hatom Oracle Smart Contract will Fail unless the prices return within the tolerance range.
If the final tolerance is Surpassed: The price is deemed invalid and the Hatom Oracle Smart Contract issues an event to alert the community that the last anchor tolerance has been exceeded. It then sends the most recent valid price to the Controller Smart Contract. The Oracle is suspended, and all subsequent price requests will Fail unless there's a manual intervention by the Guardian to Unpause the Oracle.
The Guardian Bot has been specifically designed to closely monitor the Lending Protocol. Its role is to track price feeds from the Price Aggregator and the Safe Price, compare them, and identify any irregularities or discrepancies in the prices of the integrated assets. The Bot will also autonomously pause the Protocol in such occurrences and notify us for additional monitoring and necessary action.
In which represents the Reserve Factor, i.e. the fraction of the interest that goes to the Protocol Reserves. Notice that this equation can be discretized in a similar fashion as we did with the total borrows.
Finally, a portion of the liquidation incentive being paid to liquidators will probably be redirected to the Protocol Reserves. This means that might increase and present a discontinuity at liquidation time points.
The borrow and supply rates are defined through a mathematical model that relies on fixed parameters and the utilization factor. At any point in time, the Money aMrket utilization factor is defined as:
Where represents the total borrowed amount and is the amount of underlying liquidity available, given by:
In which is the available cash and are the Protocol reserves. Nowadays, the state of the art model is a piecewise linear model with an optimal utilization.
At this point, it is important to discuss some edge cases. When there are no borrows, i.e. , the utilization is zero. On the other hand, when liquidity is zero, we cap the utilization as the first utilization that yields the maximum borrow rate, such that:
In which represents the token total supply and with an initial condition . Lenders will receive these tokens when they deposit underlying into the pool. On the contrary, they will have to redeem back those tokens in exchange for more underlying than what they have previously deposited. The conversion is performed as follows:
Where and represent underlying and token amounts respectively.
We might need to distribute rewards either to incentivize the use of our Money Markets or for yield in our safety modules. For that purpose, we propose a rewards mechanism based on a speed of rewards (an amount of tokens being distributed per second for all beneficiaries) and the fraction of ownership for each individual account. Namely, the total amount of tokens being distributed as rewards per is:
In which is the speed of rewards. An account gets rewards based on its supplied, borrowed or staked amount and the total amount being supplied, borrowed or staked:
In which is the account’s rewards, is the account supplied, borrowed or staked amount and is the total supplied, borrowed or staked amount. This previous equation can be written as:
can be considered as the price of an index, stock or share. This allows the account’s rewards computation to be performed as the amount of shares times the share price. This trick decouples the problem and requires re-computing only the index price at each protocol interaction but does not require updating rewards for all accounts at all interactions (these kinds of loops are computationally prohibited in smart contracts development). Now, we can implement the same discretization scheme as before, such that:
Notice that the times are a subset of times . In other words, a particular account needs to be updated at a given date while the index price is updated at all protocol interactions .
as of 16/07/2023
Hatom Protocol is currently deployed on the MultiversX Blockchain on the following networks:
-Devnet:
Creator Account Address:
erd10lug6rlsqutjp9tkxej498qc5usdp4k2q04cy2amcjf9kxdmlfps02jfxt
Controller Contract Address:
erd1qqqqqqqqqqqqqpgqgxxa9qzmgdvf79fa0qgyprxng377w8sdlfpses4dkw
EGLD Market Contract Address: erd1qqqqqqqqqqqqqpgqsd7cfah98xkap742cmqewjk4gdcuqlsvv5ysqur77x
Token Identifier: HEGLD-3b8c85
SEGLD Market Contract Address: erd1qqqqqqqqqqqqqpgqryfel49hklrpf67sjcnvnfqlgtt89a24v5ysx2amym
Token Identifier: HSEGLD-1c27ac
WTBC Market Contract Address: erd1qqqqqqqqqqqqqpgqhvsa60qjugqsstkzuuuugje4nzf3hw6av5yspqq3k9
Token Identifier: HWBTC-b78ffb
WETH Market Contract Address: erd1qqqqqqqqqqqqqpgqukdqcughz0kmgev7dgfyfyjpcxvghq6tv5ys3676cn
Token Identifier: HWETH-35667f
USDC Market Contract Address: erd1qqqqqqqqqqqqqpgq38svdf4cu77wgh80u9nq38q5uglqewp9v5ys694qa6
Token Identifier: HUSDC-9b1b64
BUSD Market Contract Address: erd1qqqqqqqqqqqqqpgqcalcacatpmg5p6mxag79t0r9z93re4gsv5ysj9vzsg
Token Identifier: HBUSD-ecbdef
USDT Market Contract Address: erd1qqqqqqqqqqqqqpgqz7g3altv6v5mvq57xqzscprxycy6xpdjv5ysrppgue
Token Identifier: HUSDT-1bad7f
UTK Market Contract Address: erd1qqqqqqqqqqqqqpgqczx92cj9sdl7q532n46vjthd2avpmd08v5ys0ffcq8
Token Identifier: HUTK-f9e2c8
HTM Market Contract Address: erd1qqqqqqqqqqqqqpgqf0zs5ql5jy0l8g87a9r50wd43r9hss4qv5ysjhrruq
Token Identifier: HHTM-60db66
WTAO Market Contract Address: erd1qqqqqqqqqqqqqpgqrmg6gvnwvkxgumqdfqawdazn9ynvqc0qv5ysy72mxu
Token Identifier: HWTAO-89688a
SWTAO Market Contract Address: erd1qqqqqqqqqqqqqpgqtmdyex9483pah0zchj3erpwtlahqn0azv5ysvy4la6
Token Identifier: HSWTAO-c76bd4
-Mainnet:
Creator Account Address:
erd1cc2yw3reulhshp3x73q2wye0pq8f4a3xz3pt7xj79phv9wm978ssu99pvt
Controller Contract Address:
erd1qqqqqqqqqqqqqpgqxp28qpnv7rfcmk6qrgxgw5uf2fnp84ar78ssqdk6hr
EGLD Market Contract Address: erd1qqqqqqqqqqqqqpgq35qkf34a8svu4r2zmfzuztmeltqclapv78ss5jleq3
Token Identifier: HEGLD-d61095
SEGLD Market Contract Address: erd1qqqqqqqqqqqqqpgqxmn4jlazsjp6gnec95423egatwcdfcjm78ss5q550k
Token Identifier: HSEGLD-c13a4e
USDC Market Contract Address: erd1qqqqqqqqqqqqqpgqkrgsvct7hfx7ru30mfzk3uy6pxzxn6jj78ss84aldu
Token Identifier: HUSDC-d80042
USDT Market Contract Address: erd1qqqqqqqqqqqqqpgqvxn0cl35r74tlw2a8d794v795jrzfxyf78sstg8pjr
Token Identifier: HUSDT-6f0914
BUSD Market Contract Address: erd1qqqqqqqqqqqqqpgqdvrqup8k9mxvhvnc7cnzkcs028u95s5378ssr9d72p
Token Identifier: HBUSD-ac1fca UTK Market Contract Address: erd1qqqqqqqqqqqqqpgqta0tv8d5pjzmwzshrtw62n4nww9kxtl278ssspxpxu
Token Identifier: HUTK-4fa4b2
WETH Market Contract Address: erd1qqqqqqqqqqqqqpgq8h8upp38fe9p4ny9ecvsett0usu2ep7978ssypgmrs
Token Identifier: WETH-b3d17e
WBTC Market Contract Address: erd1qqqqqqqqqqqqqpgqg47t8v5nwzvdxgf6g5jkxleuplu8y4f678ssfcg5gy
Token Identifier: WBTC-49ca31
wTAO Market Contract Address:
erd1qqqqqqqqqqqqqpgqz9pvuz22qvqxfqpk6r3rluj0u2can55c78ssgcqs00
Token Identifier: HWTAO-2e9136
swTAO Market Contract Address:
erd1qqqqqqqqqqqqqpgq7sspywe6e2ehy7dn5dz00ved3aa450mv78ssllmln6
Token Identifier: HSWTAO-6df80c
as of 17/06/2023
We call borrowing the operation of taking a loan from a lending protocol by taking tokens out of a pool of assets. In the opposite of Lending, which is supplying tokens to a pool of assets.
Selling your asset pushes you to close your position on that asset. If you are long on the asset, you would not be entitled to the potential upside value gain. When you Borrow, you can get liquidity without selling your asset. Users usually Borrow to leverage their holdings, make new investment opportunities, or unexpected expenses.
To Borrow, you have to deposit an asset to be used as collateral. Once you have deposited your collateral, go to the supplying section of the «App», and select the asset you want to Borrow. Select the amount you wish to Borrow and confirm your transaction. The amount you can Borrow depends on the amount you have deposited and used as Collateral.
The max amount that a user can Borrow depends on the amount of Collateral deposited and the token's Collateral Factor. The Collateral Factor - expressed as a percentage - is a multiplier used against your supplied assets.
The maximum amount you can Borrow also depends on the available liquidity. For example, you can’t Borrow an asset if there is insufficient liquidity or your Health Factor doesn’t allow you to.
You have to repay your loan using the same asset you borrowed. For example, if you Borrow 1 EGLD, you must repay 1 EGLD plus the interest accrued. If you want to pay back your loan based on USD price, you can Borrow USDC stable coin.
We have implemented an additional feature called Repay Dust, that if enabled within the transaction, will save you both Time and Fees. Repay Dust let you get rid of the whole accrued interests, even those accumulated within seconds when the transaction was being broadcasted. Read more about this last feature here.
The rate is Variable. It is based on the Supply and Demand in Hatom Protocol. The variable rate will vary depending on market conditions over time and could be the optimal rate.
The Interest Rate you have to pay for borrowing assets is based on the Supply and Demand ratio of the asset. The interest rate of each asset changes constantly depending on market conditions. The current interest rate is available in the borrowing section of the «App».
The Health Factor is a numeric representation of the safety of your deposited assets against the borrowed assets and their underlying value. The higher the value is, the safer your funds are from being Liquidated.
A multiplier represents the Liquidation Threshold. For example, HealthFactor
of 0.9 means that if the amount you borrow is worth (at least) 0.9 of your collateral, your position is subject to liquidation. Must follow: CollateralFactor <= HealthFactor
< 1.
Note that : HealthFactor
also refers toLiquidationFactor
.
The Health Factor will increase or decrease depending on the Value Fluctuation of your deposits. An increase in your health factor will improve your Borrow position by making the Liquidation Threshold more unlikely to be reached. If the value of your collateralised assets against the borrowed assets decreases instead, the Health Factor will also decrease, thus increasing the risk of Liquidation.
There is no specific time to pay back the loan. You can keep the loan as long as you want if your position is safe.
Keep in mind that the accrued interest will increase as time passes, making your Health Factors decrease and increasing the Liquidation risk of your assets.
You can pay back your loan by going to the 'Borrowings section' of your Dashboard, selecting the asset you have borrowed, and clicking on the repay button. Select the amount you want to pay back and confirm the transaction.
When repaying your total loan, you may find some "Dust" left from the loan that you still need to repay. It has been generated while you were paying back your loan as the interest gets accrued every second.
You can remove that dust by clicking on the "Max" button and making sure that the "Repay Dust" box is selected. A transaction with a slightly higher amount than what is due will be sent, the total of your loan will be repaid, and the small difference left will be sent back to your wallet during the same transaction.
For example:
-Let's suppose that you want to repay your loan of 10.1 EGLD.
-You will go to the "Repay" section, click on "Max" and make sure that the "Remove Dust" box is selected.
-Once you click on "Repay", a transaction of around 10.1101 EGLD will be sent.
-After you confirm the transaction in your wallet, your total loan will be paid, and you will receive back approximately 0,0101 EGLD in your wallet.
There are two options to avoid Liquidation. You can either repay your loan or deposit more assets to increase your Health Factor. Repaying the loan is the option that would increase your Health Factor more.
as of 17/06/2023
The addition of new Tokens to the Hatom Ecosystem is a community-driven process that underscores our commitment to decentralization. It typically begins with the discussion of a Proposal through social media platforms.
In this Proposal, several Tokens that could be added to the platform are discussed. After a Proposal has been created and validated, it is then put forward to the Community for voting. This process ensures that the listing of new Tokens is in alignment with the interests and preferences of our users.
The Community members, holding staked HTM Tokens, can cast their votes to decide if they wish to list the proposed Tokens. This mechanism places the decision-making power directly into the hands of our users, allowing them to shape the future of the Hatom Ecosystem. Ultimately, only the Tokens that are secure and viable to be listed, and that receive the most Community support will be considered to the Platform, expanding the array of assets available for lending, borrowing, and staking within the Hatom Ecosystem.
as of 17/06/2023
Hatom Lending Protocol is a decentralized lending and borrowing platform operating within the MultiversX Network. It employs algorithmic methods to facilitate seamless transactions between market participants.
Liquidity providers, or suppliers, contribute assets to the market, thereby earning interest on their deposits. Simultaneously, borrowers are able to secure loans, adhering to a collateralized model to ensure secure transactions and minimize risk.
We are pleased to announce that a Devnet version of the Lending Protocol has been successfully deployed and is now open for testing. This serves as an opportunity for users to familiarize themselves with the platform's offerings and operations prior to its full launch.
Disclaimer: Hatom Lending Protocol is open-source, and all smart contracts will be publicly available. Still, it's forbidden to fork it for commercial use, as Hatom Lending Protocol is protected and subject to a "Business Source License," a trademark of MariaDB Corporation Ab.
as of 17/06/2023
Lending is the process of supplying tokens to a pool. In exchange for giving liquidity to this pool, users will gain interest in the tokens they have deposited.
This earned interest comes from the users who pay interest to borrow tokens.
Lenders can withdraw their supplied tokens at any time (as long as they aren’t being used as collateral to borrow tokens and not all the tokens are being borrowed). There is no withdrawal fine or time lock.
Go to the supplying section on the «App» and select the asset you want to deposit. Choose the amount you wish to deposit and confirm your transaction. Once the transaction is approved, your deposit will be successfully registered, and you will receive a receipt token called HToken that accrues interest following the APY of its respective money market.
The returns will also be increased with the additional rewards, made possible by the incentive strategies put in place by the Hatom team.
HTokens holders receive earnings that evolve following the market conditions based on the interest rate paid on loans - suppliers share the interests paid by borrowers corresponding to the average borrow rate times the utilization rate. The higher the reserve utilization, the higher the yield for suppliers.

Each asset has a supply and demand market; each has its own APY (Annual Percentage Yield), which evolves with time. You can find more information about each market on the «Markets» page.
Note that: If you want to learn more about HTokens, please visit: https://esdt.io.
There is no minimum or maximum amount to deposit, which means you can deposit any amount you want. Keep in mind that even though the MultiversX network has low fees compared to other networks, for really low amounts, the transaction fee of the process might be higher than the expected earnings. It is recommended that you consider this when depositing very low amounts.
To withdraw, you need to go to supplying section on the «App», select the market of your deposited asset, and click on «Withdraw». Select the amount you want to withdraw and confirm the transaction. You can also use your «HTokens» as liquidity without withdrawing.
There should be enough liquidity (not borrowed) to be able to withdraw. If there isn’t enough liquidity, you would need to wait for more liquidity to be deposited from suppliers or repaid by borrowers.
In the "Hatom Protocol", you can select the exact amount you want to use as collateral from your supplied assets.
To add collaterals, you need to go to the "Collateral" Pop-up in the supplying section, click on the "Add" button, select the amount you want to add as collateral and confirm the transaction in your wallet.
You can also remove an asset from being used as collateral by going to the "Collateral" Pop-up in the supplying section, clicking on the "Remove" button, selecting the amount you want to remove from being used as collateral, and confirming the transaction.
You can completely remove an asset from being used as collateral if your asset is not actively being used to borrow.
Note that: You need to be careful not to put your position in an unhealthy state when removing an asset from being used as collateral, as you may be subject to Liquidations.
After depositing your tokens, the pool will mint HTokens and credit you. These HTokens prove that you have supplied assets to Hatom protocol. The system will ask for those HTokens back once you try to withdraw your assets from the supply side.
When you withdraw your deposited tokens, you will receive a higher amount than the amount you started with, proportional to the token’s APY.
APYs in Hatom Money Markets are floating and not fixed. Rates get updated and can fluctuate within short periods. Rates received by lenders are determined by the rates that the borrowers pay.
For example, if you deposit 10 EGLD with an average APY of 7%. You will notice that your wallet contains 10 EGLD worth of hEGLD in it. Once you withdraw your EGLD after one year, you'll return the hEGLD and receive 10.7 EGLD (your original 10 EGLD plus the 7% APY).
HTokens can be considered receipt tokens provided to suppliers upon depositing crypto assets to the protocol.
They are at the core of the lending protocol as they are minted or burned whenever a user supplies or withdraws a crypto asset.
Every HToken has a unique exchange rate that increases over time, making them exchangeable to a superior amount of their underlying asset. However, the numbers of hToken in the user’s wallet remain the same.
Each Money Market has its HToken. And any action performed by a user, whether it be supplying, withdrawing, borrowing, repaying, or liquidating a position, is completed through interacting with an HToken smart contract.
as of 18/06/2023
The act of shorting a token is betting against it; another way to explain it is that you can make a profit if the value of the token decreases.
To short EGLD, you can supply USDC as Collateral and Borrow EGLD against it. If someone Borrows 10 EGLD, they would then sell the 10 EGLD for USDC. If the price of EGLD was to fall, they could buy back the 10 EGLD for less USDC, thus closing their Borrow position and gaining the difference.
I) First of all, Connect Your Wallet(1) and then select the USDC Money Market(2).
II) "Supply" USDC.
III) "Activate it as Collateral".
IV) "Take a loan" in the form of EGLD.
V) Go to "xExchange" and sell your EGLD for USDC.
VI) Wait for the EGLD price to drop and then buy back EGLD with USDC.
​ VII) Go to the Hatom Lending Protocol, "Repay your Loan", and pocket the difference.
as of 17/06/2023
This section is aimed at lenders and borrowers. It regroups the different keywords you may find in the and their definitions.
We refer to the Money Market as any token listed in a lending network. A Money Market can be understood as a pool of tokens to which lenders provide liquidity and from where borrowers take liquidity.
The Utilisation Rate is a percentage that shows how much of a Money Market’s total value is being borrowed. It can be calculated by dividing the (Total Value of Assets Borrowed) by (Total Value of Assets Supplied).
The Collateral Factor is expressed as a percentage. It’s a multiplier used to calculate the maximum amount you can borrow against your collateral. The Collateral Factor differs from one token to another. For example, if EGLD has a collateral factor of 80%, for every $1,000 of EGLD supplied, you can borrow $800 of any available token.
Borrow Limit Used is a percentage that indicates the ratio amount you currently have borrowed to the total amount you are allowed to borrow. For example, if you can borrow a maximum of $1,000 (as determined by the Collateral Factor of the supplied token), borrowing $750 would equate to 75% of the Borrow Limit Used.
The maximum of tokens that can be borrowed from a MM (best thought of in terms of a percentage of tokens in circulation, e.g., If there are 100,000,000 tokens in circulation, then a BorrowCap of 5,000,000 is 5%)
The portion of borrower-paid interest (per second) to the Reserve. The remainder of the borrower-paid interest goes to the MM’s suppliers.
The maximum value (in USD) can be used as Collateral to borrow against. To be used as Collateral, the total active Collateral in the said asset must be smaller than ActiveCollateralCapUSD.
The Supply APY is a percentage that reflects the amount of interest a user would earn over one year for supplying tokens. On the other hand, The Borrow APY reflects the interest the borrowers pay for borrowing tokens.
HTokens are issued to lenders after supplying assets to a lending network. HTokens are exchanged for the underlying asset when users wish to withdraw their supplied assets.
The Token that can be lent/borrowed in the MM.
The number of Underlying Tokens held by the MM. The balance increases whenever tokens are deposited into the MM and decrease whenever tokens are borrowed from the MM.
The total amount of Underlying Tokens that the MM has set aside as a protocol fee. This amount increases as borrowers pay interest and decreases when the admin withdraws these tokens. The Reserve can be used, among other things, as an insurance fund to cover the bad debt incurred by the MM.
as of 17/06/2023
Liquidation is the process of repaying a borrower’s interest rate on their behalf in exchange for a fragment of their Collateral. Liquidators are incentivised to continuously look for loans eligible for liquidation to keep a lending network healthy and prevent bad debt.
A Liquidation penalty (or ) is a cut in price at which a liquidator receives a user’s collateral when completing a liquidation. This discount varies for each asset, encouraging liquidators to complete Liquidations to keep a healthy state.
You can find the Liquidation penalty of each asset by going to the section and clicking on the asset.
The amount of a position that can be Liquidated at one time is set at 50% in the Hatom Protocol (the ), which means that only a fragment of the borrower’s debt is repaid and not all of it.
For example, a position where you have supplied $2,000 USDC and took a loan of $800 in EGLD is eligible for Liquidation. Suppose the for USDC is 10%.
A Liquidator will come and pay on your behalf up to $400 in EGLD (50% of what you borrowed). In return, the Liquidator will get $440 of your USDC: $400 USDC + $40 USDC for the Liquidation Penalty.
Your new position after the Liquidation: Supplied Value - $1,560 in USDC, Borrowed Value - $400 EGLD.
To avoid getting Liquidated, the value of your Collateral has to be worth sufficiently more than your loan.
Here is some advice that can help you avoid getting liquidated:
Try not to the maximum amount.
Check on your position frequently to ensure it remains in good health.
Use a Stablecoin in either the deposited or borrowed asset to reduce the number of variables you have to monitor.
Preparing a repayment plan before taking a loan to be prepared for any scenario.
If you are still at risk of Liquidation after taking all the safety measures there are two things you can do:
You can pay back your loan or a fragment of the amount you have borrowed.
You can deposit more Collateral, thus decreasing your loan to value ratio.
The Liquidation Factor is a percentage that indicates the value at which occurs and can be thought of as the ratio between the supplied value and the borrowed value. For example, if a user deposits EGLD and has a Liquidation Factor of 75%. When the value of the borrowed positions reaches 75% of the supplied EGLD, a can occur. The Liquidation Factor differs from one token to another.
The Liquidation Limit Bar is a percentage that indicates the ratio of your borrowed value to the borrowed value that would trigger . It tracks how close your borrow position is to being liquidated. When the Liquidation Limit attains 100%, you can be liquidated. For example, if a user supplies $1,000 EGLD as collateral and has a factor of 70% (so the user’s position gets liquidated when his borrow value equals $700). If he borrows 1 HTM worth $350, his liquidation limit bar would be 50% ($350 Borrowed/$700 Liquidation Value.)
A Liquidation Incentive is a cut in price at which a Liquidator receives a user’s collateral when completing a liquidation. This discount encourages Liquidators to complete to keep a healthy state.
A Close Factor is a percentage that indicates the amount of a position that a Liquidator can close at one time when performing a .
Anyone can participate in the Ecosystem. It is a competitive market, and some liquidators even develop their solutions and bots to be the first to liquidate positions and receive the .
as of 18/06/2023
Leverage is the act of using a loan to buy more of an asset, therefore increasing exposure and potential profits (or losses).
To leverage a long EGLD position, you can supply EGLD and take USDC as a loan. You can then use that USDC to buy more EGLD. If the price of EGLD were to rise, a fragment of the EGLD bought could be sold to pay off the USDC loan, therefore pocketing the additional EGLD as profit.
I) First of all, Connect Your Wallet(1) and then select the EGLD Money Market(2).
II) "Supply" EGLD.
III) "Activate it as Collateral".
IV) "Take a Loan" in the form of USDC.
V) Go to "xExchange" and sell your USDC for EGLD.
VI) Wait for the EGLD price to rise and buy back USDC with EGLD.
VII) Go to the Hatom Lending Protocol, "Repay your Loan", and pocket the difference.
as of 17/06/2023
This segment will look at few examples how a user can use a Lending Protocol to his advantage. First, reading the Lending, Borrowing, and Liquidations section is essential to understand better the risks involved.
as of 18/06/2023
If you can create a or position that uses leverage, you can Cycle this leverage to increase further the exposure of that position. If a user makes a against EGLD, he would supply USDC, EGLD against it, and then sell the EGLD. To start a Leverage Cycle, they would supply the USDC generated from the EGLD sale as additional Collateral to get a loan of even more EGLD and repeat the process many times. Each Collateral Supply will permit a smaller position, but there is a limit on the number of Cycles performed.