Money Market Parameters
- The maximum that can be borrowed on a particular asset.
- Example: CRO collateral factor is 50%, if the price of CRO is $100, the maximum that can be borrowed using CRO as collateral is $50 in other assets.
- The percentage of the spread between borrower's and lender's interest rates that accrues to the Tectonic protocol's treasury. It is made to sustain the protocol and pay protocol contributors.
- Example: Reserve factor of 20% means that 20% of the interest paid on the asset is for the protocol.
- The maximum amount that can be liquidated in a single transaction.
- Example: 50% Close Factor means that a maximum of 50% of an account's borrow that is enabled as collateral can be repaid in a single liquidate transaction.
- The Liquidation Fee is 10% with 7.2% going to liquidators as an incentive to perform liquidations and to keeping the protocol solvent, while the remaining 2.8% goes to Tectonic's treasury.
- The funds accruing to Tectonic are used for expenses related to protocol maintenance (such as operating expenses) and to fund further developments.