11 times
, increasing their exposure to price changes. This is possible because U.AVAX can be borrowed against AVAX, sold on the open market to purchase more AVAX — rinse and repeat.* 110%
. A minimum debt of 200.00
U.AVAX is required.0.5%
under normal operation. The fee is 0%
during Recovery Mode.
A 20
U.AVAX Liquidation Reserve charge will be applied as well, but returned to you upon repayment of debt. baseRate
. The fee rate is confined to a range between 0.5%
and 5%
and is multiplied by the amount of liquidity drawn by the borrower.0.5%
and the borrower draws 4,000
U.AVAX from his open Trove. Being charged a fee of 20.00
U.AVAX, the borrower will obtain 4,000.00 U.AVAX
110%
.110%
. So if your Trove has a debt 10,000
U.AVAX, you would need at least $11,000
worth of AVAX posted as collateral to avoid being liquidated.150%
(e.g. 200%
or better 250%
).9.09% (= 100% * 10 / 110)
of your collateral’s Dollar value.20
U.AVAX is set aside as a way to compensate gas costs for the transaction sender in the event your Trove being liquidated. The Liquidation Reserve is fully refundable if your Trove is not liquidated, and is given back to you when you close your Trove by repaying your debt. The Liquidation Reserve counts as debt and is taken into account for the calculation of a Trove's collateral ratio, slightly increasing the actual collateral requirements.1 U.AVAX = $1
), the maximum achievable leverage ratio is 11x
. It is given by the formula: