| Game Token | Collateral | Borrow per Collateral |
|---|---|---|
The 'Borrow per Collateral' is the maximum number of CROW tokens that can be borrowed for one deposited WEMIX. By specifying the amount of WEMIX used as collateral, users can determine the maximum number of CROW tokens available for borrowing within that limit and proceed to borrow any amount up to that maximum.
The price of WEMIX is updated every 10 seconds, so the ‘Borrow per Collateral’ will vary according to the price of WEMIX. However, since CROW tokens are not subject to liquidation, users are relieved from the concerns of potential liquidation amidst WEMIX price fluctuations, even if they have borrowed the maximum number of CROW tokens.
As the WEMIX price increases, so does the ‘Borrow per Collateral’. This mechanism increases the efficiency of asset utilization by allowing users to borrow additional tokens in response to an increase in the WEMIX price, even if they have already borrowed the maximum number of CROW tokens.
Conversely, as the WEMIX price decreases, so does the ‘Borrow per Collateral’. However, for users who have already borrowed the maximum number of CROW tokens prior to any reduction in ‘Borrow per Collateral’, there is no immediate obligation to repay. Since CROW tokens are not subject to liquidation, users can maintain stable borrowing and usage of CROW tokens, unaffected by the volatility of the WEMIX price.
The ‘Maximum Borrow Capacity’ is the maximum number of CROW game tokens a user can borrow. It is determined by the number of collateral deposited and the 'Borrow per Collateral'.
For example, if the current 'Borrow per Collateral' for CROW is 3, a user can borrow up to 300 CROW tokens by using 100 WEMIX as collateral.
As the WEMIX price increases, so does the ‘Borrow per Collateral’, thereby increasing the maximum number of tokens a user is eligible to borrow. Consequently, users who have already borrowed the maximum amount of CROW tokens at the time of borrowing will have the opportunity to borrow additional CROW tokens due to the price increase of WEMIX. This additional borrowing capacity is called ‘Available to Borrow.’
However, the ‘Available to Borrow’ cannot exceed the ‘Available Liquidity’, which is the number of CROW tokens that can be borrowed at this point across the service. This means that an individual user can only borrow within the ‘Available Liquidity’ that the service can currently provide. Therefore, even if the ‘Maximum Borrow Capacity’ for an individual user increases due to the increase in the WEMIX price, the ‘Available Liquidity’ will determine whether the ‘Maximum Borrow Capacity’ increases.
[Example] Calculating ‘Available to Borrow’ when the ‘Borrow per Collateral’ of CROW is 2
Suppose a user deposits 2 WEMIX and borrows 4 CROW, the maximum amount allowed.
The WEMIX price goes up, and the ‘Borrow per Collateral’ increases to 3.
This increase in ‘Borrow per Collateral’ means that the user can now borrow up to 6 CROW tokens, making ‘Available to Borrow’ an additional 2 CROW tokens.
On the other hand, as the WEMIX price decreases, so does the ‘Borrow per Collateral’, reducing the maximum number of tokens a user can borrow. However, users who have already borrowed CROW tokens do not need to repay to meet the decreased limit. This is because the CROW tokens are not subject to liquidation, which allows users to borrow and use game tokens without the concern of WEMIX price fluctuations.
CROW
WEMIX
Varies with collateral price
