🏧Lending Pools
Eternal Finance offers lending vaults for users who would like to HODL their tokens while enjoying high interest rates safely.
Mechanism
Farmers can just deposit single token to the vault and enjoy yield without suffering impermanent loss.
The smart contract will mint ibTokens as receipt to prove the ownership of the loan.
Each token vault will lend the token to all pairs formed with this token. That means all pairs share the same token pool.
The lending interest rate of token depends on our utilization rate and triple-slope interest rate model.
All assets are protected by Liquidation Bot.
High Level Information
Total Supply — The total amount of tokens supplied to the lending pool
Total Borrowed — The total amount of tokens borrowed from the lending pool
Utilization — The ratio between Total Borrowed and Total Supply
Wallet Balance of Token and ibToken
Interest Bearing Token
When users deposit their assets to a lending vault, they will receive ibTokens as a proof of ownership of the loan. "ibToken" stands for "Interest-bearing Token", where the exchange rate of 1 ibToken to original Token increases overtime - thus also increasing the interest receivables. Besides lending interests, users can also stake the ibTokens into Eternal Finance's vaults to earn extra token rewards.
Interest Rate Model
The interest rates for depositing the assets above are determined by the utilization rate of the lending vaults, following their corresponding interest rate curve.
Eternal Finance adopts a triple-slope interest rate model to determine borrowing interest rates. Different assets shall employ different parameters of the same model.
Borrowing Interest = Multiplier * Utilization + Base Rate
Liquidation
If, at any time, the collateral value for a borrower’s loan is less than the minimum collateral required, the loan will be liquidated. Anyone can liquidate a loan in a liquidatable state in a permissionless manner. The liquidator repays the loan and receives, in exchange, the value of the borrowed LP tokens multiplied by the liquidation incentive. The liquidation mechanism helps ensure the stability of the protocol and safeguards lenders' assets.
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