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System configurations
BOB CDP is a decentralized borrowing protocol, however, there are certain parameters and risk factors that need to be established during runtime for smooth operation.
All BOB CDP parameters are configured according to Governance decisions.
Protocol governance is responsible for determining appropriate collateral types and their respective parameters. The following positions are currently being accepted as collateral:
Pool pair | Fee tiers | Max borrow factor | Liquidation factor | Min position width |
|---|---|---|---|---|
BOB/USDC | 0.01% | 85% | 90% | 0 |
BOB/USDT | 0.01% | 85% | 90% | 0 |
BOB/MATIC | 0.05% | 73% | 78% | 1000 |
BOB/WETH | 0.05% | 78% | 83% | 1000 |
During the protocol beta launch and while the risk model has not been properly battle-tested, only whitelisted entities and bots are able to participate in BOB CDP liquidation process, starting with a BOB Core Team as a first liquidator. Liquidators whitelist requirements will be lifted once a protocol becomes more mature.
Protocol governance also has ability to setup multiple system-wide parameters. Limits are necessary to facilitate efficient liquidations and safety mechanimsm in the current implementation.
Users are free to open multiple vaults and use them as they wish, however each vault is subject to the upper limit on the amount of issued debt. Having a total debt over this limit won’t lead to a liquidation, however the protocol won’t allow additional minting operations until the debt is partially or fully repaid.
Each deposited collateral NFT should be worth at least 100 BOB at the moment of the deposit.
After any successful collateral deposit, a vault cannot store more than 2 NFT collaterals.
Total BOB CDP minting allowance has a static hard ceiling established by governance. However, the effective immediate debt ceiling may be lower, as its rate of increase is limited over time. See a similar DC-IAM module approach in MakerDAO - https://mips.makerdao.com/mips/details/MIP27
During a successful liquidation, the liquidator repays BOB amount equal to the fraction of the total current collateral value. The difference between repaid value and total collateral value is the liquidation premium.
Upon successful liquidation, they protocol treasury receives an extra liquidation fee, also calculated as a fraction of the total collateral value.
Borrowers are charged with a consistent, fixed debt stability fee on the total amount of their active debt.
In the event of high market volatility, liquidators might not be able to perform their duties in a timely manner, so that total collateral margin is enough to cover all the fees. In this case, the following repayment tranches are used (from highest priority to lowest):
- 1.Liquidation premium (paid to the liquidator)
- 2.Liquidation fee (paid to the treasury)
- 3.Owed remainder (paid to the borrower)
A pool-specific parameter describing LTV factor. When reached, the position is subject to liquidation.
A pool-specific parameter describing LTV factor, limiting the borrow amount at the time of the actions intending to increase vault LTV (debt mint, collateral withdrawal).
Should be slightly less than the liquidation threshold/factor, to provide some safety margin for the borrower against potential instant liquidation.
Volatile pairs can be restricted on the min width of the position price range, in Uniswap V3 tick.s
1 tick is equal to 0.01% price difference (https://docs.uniswap.org/concepts/protocol/concentrated-liquidity#ticks)
Min width of 1000 ticks means that price range should be at least approximately 10% wide (e.g. +- 5% of the current spot price)
Last modified 1mo ago