Coslend
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Risk Parameters
Each asset in the Coslend protocol has specific values related to their risk, which influences how they are supplied and borrowed.
The table below shows a summary of the latest values.
Asset
Collateral Factor
Liquidation Bonus
Reserve Factor
Borrow Cap
Supply Cap
USDC
90%
8%
10%
No limit
No limit
USDT
90%
8%
10%
No limit
No limit
FRAX
0%
8%
10%
No limit
No limit
WETH
80%
8%
20%
No limit
No limit

Risk Parameters Analysis

The risk parameters allow to mitigate market risks of the currencies supported by the protocol. Each borrowing is guaranteed by a collateral that may be subject to volatility.
Sufficient margin and incentives are needed for the position to remain collateralised in adverse market conditions. If the value of the collateral falls bellow a threshold, part of it is auctioned to repay part of the position and keep the ongoing borrowing collateralised.

Collateral Factor

The maximum amount users can borrow is limited by the collateral factors of the assets they have supplied. For example, if a user supplies 100 DAI as collateral, and the posted collateral factor for DAI is 75%, then the user can borrow at most 75 DAI worth of other assets at any given time. Each asset on Coslend can have a different collateral factor.

Liquidation Bonus

The additional collateral given to liquidators as an incentive to perform liquidation of underwater accounts. For example, if the liquidation incentive is 1.1, liquidators receive an extra 10% of the borrowers collateral for every unit they close.

Reserve Factor

The reserve factor defines the portion of borrower interest that is converted into reserves.
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Risk Parameters Analysis
Collateral Factor
Liquidation Bonus
Reserve Factor