An Introduction to rLoanbar— — Early product form of Seed-Lending

NOTE:

We Rebrand Recently. New brand is RiceQuant and Old Brand is ifarm.finance. and $IFA=>$RICE, iLoanbar=>rLoanbar.

Liquidity mining is a exciting cold start way for communities and products. We also know that the success of it is very important to the future development of the product.In the previous article, we have introduced the early issuance of IFA and iToken, therefore, in the process of advancing our products, we have prioritized the release of the iLoanbar for enhancing farming, which has laid a solid foundation for Seed-Lending, which is under development with GTAS as the business core.

Introduce iLoanbar

iLoanbar is a product component that support borrowing iToken through collateralizing popular crypto assets. With iLoanbar you can enhance the farming, and when you get involved, you can see that iLoanbar offers many arbitrage opportunities to help you increase your yield-farming.

How to Borrow iToken?

Seed DAI, and then lock all or part of the DAI that has been seeded to borrow iUSD

Seed wBTC, and then lock all or part of the wBTC that has been seeded to borrow iBTC

Seed wETH, and then lock all or part of the wETH that has been seeded to borrow iETH.

Use borrowing iETH as an example

Deposit accepted collateral assets(early supported wETH) into the iLoanbar to receive iETH. The initial borrow ratio is 70%, and the initial liquidation ratio is 90%. For example, if you deposit 100 wETH into iLoanbar, you would receive 70 iETH. When your debt plus interest fees is above 90 iETH, your collateral would be at risk of liquidation. Both borrow and liquidation ratios can be changed within a specified range via the governance system.

Excess Collateral in iLoanbar

Initial params below

Governance Params and Range

To avoid collateral attacks, the minimum borrow amount setting see blew table.

Debt repayment and interest rates

The repayment of the debt is divided into 2 parts, the amount borrowed is principal, on which interest on the debt to be repaid can be calculated on the basis of number of days borrowed.

When the debt is repaid, the principal portion is repaid in the iToken matched with your borrowed and the interest portion of the debt is repaid in IFA.

For example

Prerequisite: iUSD Borrow Ratio 65%, Liquidation Rate 90%, Daily Interest 0.05%

Suppose Bob seeded 1000 DAI and locked it in full to borrow 650 iUSD. Since iUSD can be used to provide liquidity to DAI/iUSD trading pairs in Uniswap to earn fees and seed DAI/iUSD-UNIV2-LP to mine more IFA, Bob decided to hold debt order 60 days before repaying the debt. So, Bob’s debt interest is 650*60*0.055% = 21.45 iUSD.

When Bob performs a debt repayment, the actual repayment is 650 iUSD of the principal portion and interest portion of the debt is 21.45 iUSD equivalent to IFA.

Liquidation

When the debt defaults, the debtor is at rist of liquidation. That is, compulsory debt liquidation. The execution of a forced liquidation can be triggered by any one as long as the execution conditions are met and we refer to the person who triggers the forced close as the liquidator.

When the borrower’s debt plus interest fees is above the collateral value and liquidation ratio, the collateral will be under risk of liquidation. Anyone can trigger the process through the smart contract. The liquidator will retrieve the collateral plus the farming rewards by paying back iToken at a discount ratio. In other words, in the liquidation process, the liquidator is required to a liquidation cost, which value less then default debtor’s collateral to retrieve the collateral plus the unclaimed farming rewards.

discount Ratio = 50% * (Liquidation Ratio + 1)

Liquidation costs constitute

  1. The default debtor’s principal(borrowed amount): Pay with iToken. If a defaulting debtor initially borrowed 1000 iUSD, liquidatior will have to pay 1000 iUSD for performing liquidation.
  2. Interest fee: Pay with IFA. If a defaulting debtor has a cumulative interest of 100 iUSD on the debt at the time of liquidation, the triggering liquidation also need to be paid with the IFA equivalent of 100 iUSD.
  3. Liquidation fee: Pay with IFA. Liquidation fee = (default debtor collateral — max(principal + interest)) / 2

Liquidation rewards constitute

  1. Default detor collateral
  2. Default detor unclaimed IFA farming rewards

IFA Revenue

IFA Revenue is the profit settlement bank for ifarm.finance. The current phase mainly collects the benefits of the iLoanbar business. In the iLoanbar, the debtor’s interest and liquidation fees are all entered into IFA Revenue.

Usage of IFA collected in IFA-Revenue

  1. 10% IFA go to Costco
  2. 90% IFA go to farming pools.

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