🔍Protocol Specifications

Collateral Factor, Reserve Factor, Close Factor, and Liquidation Incentive

Collateral Factor

• The Collateral Factor is the maximum amount that is able to be borrowed for a specific asset. So if there is a 80% Collateral Factor on the asset you are borrowing and the price is $10.00 you will be able to borrow $8.00 in other assets.

Reserve Factor

• The Reserve Factor is the amount from the Borrower's interest that goes into the protocol. So a Reserve Factor of 10% will mean that 10% of the total interest will go into the protocol.

Close Factor

• The Close Factor is the maximum amount that can be liquidated in a single transaction.

Liquidation Incentive

The incentive provided to liquidators to carry out liquidations and maintain the protocol's financial stability.

Interest Rate Models

The utilization rate is an indicator that influences all interest rates on Ignis Finance. The utilization rate, or more simply the ratio of total assets borrowed to total assets supplied, is what determines the interest rates on Ignis Finance. So a low utilization rate means that there are fewer users borrowing a specific asset and a high utilization rate means that there are more users borrowing a specific asset.

Based on the utilization rate, the interest rates of each asset market are dynamically adjusted by Ignis's interest rate models. A high ratio would result in greater interest payments from borrowers and, as a result, greater interest payments to suppliers. This is how the protocol can ensure that more liquidity will enter into specific pools when it is needed.