Core Protocol
Creditum’s modular setup for different tokens that can be used as collateral allows the protocol to establish individual values for each token’s attribute as denoted below.
Collateral Specifications
Each collateral has a unique set of attributes specific to that token:
Stability Fee (interest) - The annualized interest rate charged for borrowing cUSD when closing a position. This fee goes to the protocol. [0-25%]
Mint Fee - The fee charged upfront for opening a debt position when minting cUSD that goes to the protocol. [0-5%]
Max Debt Ratio - (LTV) The maximum ratio of debt-to-collateral a user is allowed to borrow. This limit is placed on the amount of cUSD (debt) that can be minted based on the asset (collateral), taking into consideration the asset’s volatility, liquidity, and safety. [10-95%]
Mint Limit - the maximum amount of cUSD that users can mint based on the collateral of choice. [0, infinity)
Liquidation Threshold - the sum of the max debt ratio and a small buffer that prevents immediate liquidation for users in case the Max Debt Ratio is met. [1-100%]
Liquidation Penalty - A fee taken from the collateral earned by a user (liquidator) that liquidates someone else’s liquidatable position (user with health factor below 1). This fee goes to the protocol. [0-25%]
Depreciation Duration: The length of time during which a position can be liquidated. Within this time frame, it becomes increasingly profitable to liquidate said position because the protocol depends on liquidations to remain solvent. [10 min-1 hr]
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