Denomination Parameters
Base Denom
Description: Signifies the IBC code of the token recognized in the Cosmos ecosystem.
Importance: Crucial for identifying the underlying token in transactions.
Symbol Denom
Description: Corresponds to the symbol associated with the token.
Importance: A human-readable representation of the token.
Example: on Ethereum, the Symbol Denom of Ether is represented as "ETH."
Exponent
Description: Determines the number of decimal places used for the native token on the UX Chain.
Importance: Ensures accurate representation of token values within the network.
Example: An exponent of 6 means that 1 UX Token is represented as 1000000 in code.
Rate and Utilization Parameters
Base Borrow Rate
Description: Defines the minimum interest rate for borrowing an asset.
Importance: Influences the cost of borrowing.
Example: A Base borrow rate of 1% means that borrowers will pay at least 1% annual interest on the borrowed asset.
Kink Borrow Rate
Description: Sets the target interest rate at the kink utilization of the borrow asset.
Importance: Affects interest rate changes after the target utilization rate is reached.
Example: If Kink borrow rate is set at 80%, interest rates will change when borrowing exceeds 80% of the asset's capacity
Max Borrow Rate
Description: Represents the upper limit of the interest rate that borrowers can be charged.
Importance: Establishes a cap on interest rates to manage interest rate risk.
Example: Max borrow rate of 20% means borrowers can never be charged more than 20% interest on their loans.
Kink Utilization
Description: Determines the target utilization rate of a certain asset.
Importance: Influences the expected total borrowing of an asset.
Example: Kink utilization of 70% means the platform aims to maintain borrowing levels around 70% of the supplied assets.
Collateral and Liquidation Parameters
Collateral Weight
Description: Determines the proportion of an asset's total value that can be used to borrow assets.
Importance: Measures the borrowing power of collateral assets.
Liquidation Threshold
Description: Represents the maximum ratio of a borrower's position value to the collateral value before liquidation happens.
Importance: Manages borrower's liquidation risk effectively to prevent bad debts.
Liquidation Incentive
Description: Decides the reward when a liquidator successfully liquidates an undercollateralized position.
Importance: Motivates users to participate in maintaining the platform's health.
Min Collateral Liquidity
Description: Sets the minimum percentage of liquidity a collateral asset needs to maintain to allow liquidation to happen successfully.
Importance: Ensures collateral availability during liquidations.
Asset and Platform Risk Parameters
Reserve Factor
Description: Determines what portion of the interest earned from lending a token goes into UX Chain’s reserves, serving as an insurance fund.
Importance: Ensures the stability and sustainability of the lending platform.
Max Supply
Description: Establishes the highest amount of tokens that an asset can be supplied to UX Chain.
Importance: Manages risk exposure of any specific tokens on the platform.
Max Collateral Share
Description: Determines the max percentage of a token’s total collateral value against the total collateral value on the platform.
Importance: Acts as a risk control mechanism by limiting risk exposure to any specific tokens.
Max Supply Utilization
Description: Sets the highest percentage that an asset can be borrowed.
Importance: Caps borrowing capacity to maintain a minimum amount of pool liquidity of an asset.
Other Parameters
Oracle Reward Factor
Description: Dictates the portion of interest accrued on borrows sent to the oracle module to fund its reward pool.
Importance: Serves as the economic incentive for validators to submit accurate price information to UX.
Enable Msg Supply
- Description: Controls the ability to deposit funds into the lending pool.
Enable Msg Borrow
- Description: Determines if users can borrow funds from the lending pool.
Blacklist
- Description: Used to completely eliminate an asset from the lending pool.
