Ghast Protocol on Arbitrum
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Money-Market Mechanism

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:

a. You can only use gmdTOKENS as collateral to borrow the corresponding assets:

  • 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

b. Additional loaning liquidity will be incentivized through the following sources:

  1. 1.
    Standard Interest Fees
  2. 2.
    20% of total distributed revenue of Ghast Protocol
  3. 3.
    8,000 Annual Tokens Incentive (1,600 $GHA + 6,400 $esGHA)

c. Users are allowed to borrow 80% of the deposited asset value:

  • As the value of the assets increase by time, users have the option to further borrow more assets with the same collateral amount.

d. Interest Rate equilibrium will be set at 2/3 of the Delta-Neutral Vaults APY.

  • 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.

e. Interest rate will be capped at: 1 / our collateral rate * DN Vaults APY

  • 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.

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