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Health Ratio
This is how we calculate the Health Ratio:
First, our system will convert Collateral to USD value
Then, we will convert Borrow Amount to USD value
Formula: Health Ratio = Collateral (USD) / Borrow Amount (USD)
The Health Ratio is monitored in Real Time. If it goes below 1.2, there will be a liquidation event. You can only take a loan when the heath ratio is higher than or equal to 1.5.
Minimum Collateral
The minimum collateral is calculated to pre-fill or show guiding text when you don't input enough collateral.
Formula: Minimum Collateral (USD) = 1.5 * Borrow Amount (USD)
For example:
You borrow 200 USDC so the Minimum Collateral (USD) = 1.5 *200 = 300
If you select Solana as collateral, then we will convert 300 USD to 3 SOL ( 1 Sol = $100) to show a guiding text. It would be “Minimum Collateral: 3 SOL”
Other Formula
Borrow Interest = BorrowAmount * Borrow Interest * Duration / 365
Borrower Fee = 5% * BorrowInterest
Total repay = Borrow Amount + Interest + Borrower Fee
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