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You can find frequently asked questions and answers for each type of product here:
Storage provider Lending Pool is one type of Lending Pool. It is mainly oriented to the demand scenario where storage providers borrow FIL by mortgaging miner's assets. The protocol allows multiple miners with different owners to build a storage provider lending pool (for example: pool-1). The assets of miner nodes in the same Lending Pool can guarantee each other while retaining the independence of the nodes.
You need to first create a private storage provider lending pool and delegate nodes to the lending pool to qualify for the loan.
Use the following example to better understand the functionality of the pool. When there are miner1, miner2, and miner3 in a storage provider lending pool:
- 1.If any of the miners wants to obtain FIL that can be withdrawn, taking miner1 as an example, miner1 can withdraw up to 50% of the assets of the miner1, and the loan FIL will be transferred from the STFIL Staking Pool to the owner address of the miner1 node.
- 2.If the loan is to serve as collateral for the new sector, then miners can guarantee each other. One of the nodes (you can also create a new node miner4) can obtain a loan of up to 200% of the total assets of the three miners (leverage: 3.0x). The loan FIL will be transferred from the STFIL Staking Pool to the available balance of the miner node (withdrawal restrictions).
Smart contracts will obtain different maximum leverage based on different borrowing purposes. As node assets increase, the loan amount will also increase.
The smart contract will dynamically match the maximum loan leverage based on the storage provider's mortgage loan usage.
Taking an encapsulated miner node with an asset of 100FIL as an example, there will be the following three situations:
The more nodes entrusted to the lending pool, the more gas is consumed for each operation, so the protocol limits the number of nodes that can be added to a single pool.
The administrator of the lending pool only has the operating rights of the nodes delegated to the pool, and the ownership of the nodes is still held by the original owner of the nodes.
The deposit address of all withdrawals is the Owner, and the administrator of the lending pool cannot steal the node's assets; when the node meets the redemption conditions, the original Owner can complete his resignation independently.
After the node repays all debts, the nodes that have already mortgaged (onboarded) can be redeemed(offboarded). You can initiate a signature at the "Offboard" on the webpage.
The variable interest rate is affected by he utilization rate of funds. It will change in real time according to the utilization rate of funds. The interest rate of all borrowers at the same time is the same. The floating rate model can provide a fairer and more transparent market pricing mechanism, enabling market participants to manage their own funds more flexibly and gain greater benefits from market fluctuations.
The interest rate of the stable interest rate model remains unchanged during the lending cycle and is not affected by market supply and demand. But you can only borrow up to 20% of the available liquidity at one time. The stable rate model is usually suitable for those storage providers who want to earn predictable income over a certain period of time.
For example: the current stable interest rate for borrowing is 23%, and the liquidity of the pool is 1 million FIL, then you can borrow up to 200,000 FIL at one time, and the interest rate of this loan is 23% throughout the loan cycle. Of course, you can borrow on stable rate debt multiple times.
It should be noted that since the stable interest rate does not change with market changes, its interest rate may be higher than the variable interest rate. In addition, stabilizing interest rates may also lead to market imbalances, because they cannot be adjusted according to market supply and demand.
Define an interval [80%, 90%] as the target utilization rate for asset reserves. Beyond this range, interest rates increase significantly to ensure that the pool always maintains liquidity.
Liquidity Buffer (also known as: Exit Reserve). In order to ensure that the protocol has sufficient FIL as liquidity to meet users' unstake needs, when the protocol's utilization rate exceeds 95% (Liquidity Buffer Index: 5%). The protocol will suspend borrowing services, and the remaining funds will be given priority to users to unstake.
The Liquidity Buffer Index (Exit Reserve Ratio) is an adjustable parameter. It will be adjusted from time to time according to market-demand.
By setting upper and lower limits on interest rates, we aim to maintain rates from becoming too high or too low in extreme circumstances, thereby preventing panic among depositors and borrowers.
N is the average number of blocks produced in one epoch, M is the single block reward.
- 1.The interest rate on the variable rate will always vary with pool utilization and will be the same for all storage providers with floating rate debt.
- 2.The interest rate of the stable interest rate is determined by the stable interest rate at the moment of borrowing, and the interest rate remains unchanged during the loan cycle. But you can only borrow up to 20% of the available liquidity at one time.
- 1.According to the actual encapsulation speed of the node, one loan operation covers the encapsulation demand of 7-15 days.
- 2.The income part can be repaid in time in addition to paying the basic cost.
- 3.Continue to pledge the income part to maximize the income.
- 4.Transfer part of the proceeds to stFIL to increase income while retaining liquidity.
A run on the bank means that the available amount of FIL in the STFIL pool is zero. It is undeniable that this situation may occur.
At this time, the only option is to wait until new liquidity enters the pool, causing a decrease in fund utilization. When there is a run on the bank (or insufficient available liquidity), higher interest rates will attract new FIL users to join and encourage capable SPs to repay early, thereby returning the interest rate to its normal level.
As long as users do not lose confidence in Filecoin, a run on the bank will only be a short-term situation.
Because of the protection of the highest borrowing rate, it means that if the storage provider is at the highest interest rate within a year and has not repaid, the mining proceeds will be used to pay interest.
Just pay off the interest on time. Then the portion of the spread between APR and APY is still your node's earnings. Moreover, the maximum interest rate will be adjusted periodically according to the pledge income. Moreover, the run situation will be temporary, and SP should pay more attention to the long-term average interest rate rather than the instantaneous interest rate.
- Timely use of income output to pay down debt to reduce interest rates.
- There may be an imbalance between stFIL/FIL in the secondary market, and you can buy stFIL at a low price for debt hedging.
Liquidation means that the borrower fails to maintain sufficient collateral for the value of its position, causing the value of its position to face the risk of being liquidated. It is a mechanism used to ensure that the position value in the STFIL Protocol has sufficient collateral to protect the rights and interests of stakers.
When the miners in the borrowing pool are operating normally, liquidation events will definitely not occur.
Only after miners fails and the position value is significantly reduced will the debt ratio exceed this threshold, and liquidation will be carried out to ensure the stability of the protocol.
The liquidation threshold is a measure of when a lending pool becomes insolvent and begins liquidation.
Usually, Liquidation threshold 20%✖️(100%➖max-debt-rate) ➕ max-debt-rate
All miners in the Lending Pool will be sector-terminated to repay debts, and the remaining assets will be returned to the borrowers.
Last modified 22d ago