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As users will receive gmdTOKENS as receipt tokens for their positions in the Delta-Neutral Vaults, our Money Markets will allow users to use gmdTOKENS as collateral to borrow 80% of the value in the corresponding asset. Our Money-Market Mechanisms will be as follow:
- If you deposit gmdUSDC, you can only borrow USDC with that gmdUSDC
- If you deposit gmdETH, you can only borrow ETH with that gmdETH
- If you deposit gmdBTC, you can only borrow BTC with that gmdBTC
- 1.Standard Interest Fees
- 2.20% of total distributed revenue of Ghast Protocol
- 3.8,000 Annual Tokens Incentive (1,600 $GHA + 6,400 $esGHA)
- As the value of the assets increase by time, users have the option to further borrow more assets with the same collateral amount.
- For example, if supply and demand is at equilibrium, if the weekly APY for USDC Vault is at 30%, then the interest rate to borrow USDC will be set at 20%.
- If borrow and supply is too much skewed over one side, then the rates will be dynamic to adjust the levels of borrowing and depositing.
- Although interest rates are dynamic, interest rate will always be lower than the APY of our Delta-Neutral Vaults we to ensure looping mechanism is always capital efficient, and will never be at a loss for our users. Instead of liquidation, worse case scenario would simply be user's fund generating 0 yield.
- For example, if demand is too high for borrowing, and the DN Vaults APY is at 30%, then our interest rate can reach a max at 1 / 80% * 30% = 37.5%. At this 37% interest rate, with a 80% collateral ratio and at 30% DN Vaults APY, users' yield will be at 0, but there will never be any liquidation risks whatsoever.