Protocol Background
basic concept
basic concept
Mortgage assets: Assets used to generate parallel assets, generally native decentralized assets on the chain, such as ETH, NEST, NHBTC and other assets.
Underlying assets: parallel assets against underlying assets, such as ETH, USDT, HBTC, etc.
Parallel assets: Generated through agreement mortgages, anchoring the underlying assets, with an intrinsic value of 1:1, such as PUSD, PETH, PBTC, etc.
The following uses PUSD as an example to illustrate the rest of the concepts:
Mortgage rate:During the initial coinage, the user enters the mortgage assets to generate parallel assets, such as PUSD, where the ratio of the PUSD generated by a unit of mortgage assets to the price of the mortgage assets is the mortgage rate, and the mortgage rate is less than 1.
Clearing line:When the price of mortgage assets falls, there is a liquidation line above the mortgage rate. The liquidation line and the mortgage rate meet a certain relationship. The liquidation line is generally 10% to 20% higher than the mortgage rate.
Debt positions:After the minting user puts the mortgage assets into the contract, a debt warehouse is generated to keep the mortgage assets. When the user redeems the mortgage assets of the debt warehouse, the debt warehouse will end, and the mortgage assets will be added or re-mortgaged in the middle, sharing the same debt warehouse .
Insurance fund pool:Oracle:
Oracle:Provide on-chain price information for mortgage assets, that is, NEST Protocol.
Stability fee:Based on the stability fee designed by the mortgage rate, each debt warehouse must pay the stability fee according to the difference between the liquidation line and the current price and the time period when increasing the mortgage, minting new coins, redeeming and liquidating.
Minter:That is, users who stake their assets to mint coins.
Insurer:LP of insurance fund.
Operation process
1. Coinage
The minter puts the required mortgage assets into the contract, and generates stable coins according to the mortgage rate of his choice, such as PUSD or PETH. At the same time, the system will generate corresponding debt positions and liquidation lines.
2. Redemption
Before the debt warehouse is liquidated, at any time, the minter can return the corresponding amount of stable coins to retrieve the mortgage assets.
3. Liquidation
Once the mortgage asset price is below the liquidation line, anyone can trigger the liquidation, and the liquidation follows the following rules:
4. Supplementary collateral
Users can add collateral at any time, add mortgage into the same debt position, and modify the liquidation line at the same time, the rule is the core algorithm one.
5. Inject insurance
Anyone can inject insurance funds into the insurance fund pool, and the requirements are the corresponding underlying assets. After the injection, the share is calculated according to the net value.
6. Take back insurance
The designated redemption date of the insurance funds is once every 3 months, and each share needs to be held for at least 3 months, and redeemed according to the net value: the underlying asset is redeemed first, and the parallel assets are redeemed if it is insufficient.
7. Mint again
Users can mint coins again in the original debt warehouse, and at the same time correct the closing line, according to the core algorithm one.
8. Quick minting and exchange
Users can inject 1 USDT into the insurance fund pool to get 1 PUSD, or inject 1 PUSD in exchange for 1 USDT (if any). Pay a 2‰ handling fee according to the scale, and the handling fee is measured by assets.
9. Stability Fee
The stability fee is calculated according to the block, and the stability fee is charged for each operation of minting, redemption, supplementary mortgage, and liquidation. The stability fee is calculated in parallel with assets. For calculation, see core algorithm 2.
10. Equity insurance
The net insurance value is calculated according to the core algorithm 4.
4 core algorithms
