Collateral & Reserves
Collateral Factor
slTokens come with a collateral factor that ranges from 0% to 80%. This factor determines how much additional liquidity an account can access by minting the slToken.
Assets that are larger or more liquid typically have higher collateral factors. Conversely, smaller or less liquid assets tend to have lower collateral factors. When an asset has a collateral factor of 0%, it cannot serve as collateral and cannot be seized during a forced liquidation event. However, it can still be borrowed.
In essence, the Collateral Factor sets the maximum amount you can borrow against a specific asset. For instance, if the collateral factor for USDC is 80%, and you deposit 1000 USDC, the maximum amount you can borrow would be $800 worth of tokens (or 800 USDC in that case).
Reserve Factor
A portion of the interest paid by borrowers is allocated to the protocol, and the extent of this allocation is defined by the reserve factor, which signifies the percentage of interest directed to SolidLizard Lending.
For instance, if the reserve factor is set at 22%, it means that Solidlizard Lending obtains 22% of the interest earned on the borrowed assets. This mechanism serves to bolster the protocol's reserves, safeguarding it against the accumulation of potential bad debt. A big part of the interest earned will go to the users staking $SCALES, the protocol's governance token. Thus creating a solid and sustainable revenue model in the long run.
WETH
70%
22%
0x82aF49447D8a07e3bd95BD0d56f35241523fBab1
USDC.e
80%
22%
0xFF970A61A04b1cA14834A43f5dE4533eBDDB5CC8
USDT
80%
22%
0xFd086bC7CD5C481DCC9C85ebE478A1C0b69FCbb9
wBTC
70%
22%
0x2f2a2543B76A4166549F7aaB2e75Bef0aefC5B0f
ARB
60%
22%
0x912CE59144191C1204E64559FE8253a0e49E6548
wstETH
70%
22%
0x5979D7b546E38E414F7E9822514be443A4800529
crvUSD
80%
22%
0x498Bf2B1e120FeD3ad3D42EA2165E9b73f99C1e5
rETH
70%
22%
0xEC70Dcb4A1EFa46b8F2D97C310C9c4790ba5ffA8
Last updated