Parameter
Changes in parameter values can affect a user's Health Factor and the risk of automatic liquidation. For asset-specific parameters, please refer to the [Asset Parameters].
Max LTV (Loan-to-Value)
The Max LTV represents the maximum percentage of a collateral’s value that can be borrowed, setting the upper limit for the amount a user can borrow.
Example: If the Max LTV for USDT is 80% and a user supplies 100 USDT, the maximum amount that can be borrowed is $80, based on the collateral value of $100.
Assets with an LTV of 0% cannot be used as collateral. LTV values vary based on the type of collateral asset.
Auto-Return Threshold
The auto-return threshold is the point at which automatic return occurs for a borrowing position. If the Loan-to-Value (LTV) ratio exceeds the auto-return threshold, the smart contract repays part or all of the user's collateral to restore the borrowed assets.
Example: If the auto-return threshold is 90%, automatic return occurs when the LTV reaches or exceeds 90%.
Reserve Factor
The reserve factor is a portion of the fees generated from the Borrow & Supply pool that is accumulated to ensure protocol stability and security. It is used to safeguard the return of borrowed assets in exceptional cases where assets are not properly restored or to facilitate KSP token buybacks. The reserve factor is composed of 20% of the borrowing fees (APY) paid by borrowers and fees incurred during auto-return events.
Reward Rate Model
The Reward Rate Model adjusts the reward rate based on the utilization rate of the liquidity pool, balancing supply and demand for borrowing. The utilization rate is calculated as follows:
Pool Utilization Rate = (Total Borrowed Assets / Total Supplied Assets)＊100
The reward rate starts from a *base rate and changes at a specific slope depending on the utilization rate, controlled by parameters:
X-Axis: Liquidity Pool Utilization (%)
Y-Axis: Reward Rate (APY, %)
The graph shows an example of a liquidity pool with an optimal utilization rate of 80%. The reward rate increases gradually until the utilization reaches 80%. Beyond 80%, the reward rate rises steeply.
The reward rate model balances supply and demand for borrowing liquidity, ensuring the liquidity pool remains sufficiently available. As the pool utilization rate increases, higher rewards (Supply APY) are offered to incentivize supplier participation, while higher borrowing costs (Borrow APY) are applied to discourage excessive borrowing and encourage the natural return of borrowed assets. In cases of extremely high utilization, the removal of supplied assets may be temporarily delayed; however, all assets will eventually be recoverable without any permanent loss.
Asset Parameter
Use Collateral
LTV
Auto-return Threshold
Auto-return Fee
Reserve Factor
Optimal Utilization
WETH
USDT
50%
70%
20%
20%
90%
BORA
oUSDC
X
KSP
X
KDAI
X
KAIA
20%
60%
20%
20%
50%
oETH
X
oUSDT
X
oWBTC
X
oXRP
30%
65%
20%
20%
50%
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