Glossary Of Terms
Account Health is a measure of how close your account is to being liquidated. An
Account Health below 1.0 may be liquidated at any time. The
Account Health is a ratio of the account's
Collateral Factor-adjusted collateral value (in USD) divided by the
Market Factor-adjusted net borrow value (in USD). Click here for a deeper, more technical explanation on
The Annual Percentage Rate is the simple interest rate paid from the borrower to the lender normalized over one year. This lets lenders/borrowers easily compare the interest rate of one loan versus another even if they might have different
Example: Suppose the APR is 10%, and that the lender lends 100 USDC to the borrower.
- After 30 days, the lender will accrue 100 (10% 30 / 365) = 0.82 USDC of interest.
- After 180 days, the lender will accrue 100 (10% 180 / 365) = 4.93 USDC of interest.
- After 365 days, the lender will accrue 100 (10% 365 / 365) = 10 USDC of interest.
Learn more about APR.
Borrow Value (Real Borrow Value)
Real Borrow Value) is the aggregated value of all borrows across all
Markets of an account in USD as determined by the latest Chainlink oracle price.
Collateral Factor is a number from 0-100% assigned to every
Asset that represents a weighting of how much lesser the Qoda collateral system will mark the value of collateral posted in that
Asset from its current market price due, to the perceived market risk of the collateral.
Generally, large, liquid, safer
Assets have high
Collateral Factors, while small, illiquid, riskier
Assets have low
Collateral Factors. If an Asset has a 0%
Collateral Factor, it can’t be used as collateral, though it can still be lent or borrowed in Qoda
Collateral Value (Real Collateral Value)
Collateral Value (or
Real Collateral Value) is the aggregated value of all collateral an account has deposited in USD as determined by the latest Chainlink oracle price.
As part of the
Credit Facility for undercollateralized borrowing, some permissioned accounts may be granted a risk-adjusted
Credit Limit, generally in conjunction with a bespoke
Initial Account Health and
Minimum Account Health ratios. The
Credit Limit specifies how much the account may borrow under this bespoke
Credit Facility (in USD), risk-adjusted by the individual
Market Factors of the assets which the account may want to borrow.
Initial Account Health
Account Health required when initially taking out a new loan. The
Initial Account Health provides a safety buffer above the
Minimum Account Health so that an account cannot accidentally be immediately liquidated when taking out a loan.
Lend Value (Real Lend Value)
Lend Value (or
Real Lend Value) is the aggregated value of all lends across all
Markets of an account in USD as determined by the latest Chainlink oracle price.
Market is the place where users can borrow or lend. A
Market is made up of two components:
Underlying ERC20 Token, which is the token which is being borrowed or lent.
Maturity, which is when borrowers must repay their loans, and when lenders may redeem their
qTokensfor the underlying token.
The naming convention of
Markets is [TOKEN SYMBOL][MONTH][YEAR]. For example, the USDCJUL22
Market is where users may borrow or lend USDC tokens, maturing on 29th July 2022, 4:00 PM UTC.
Important to note: When a borrower repays their loan, they are repaying to the
Market smart contract. And when a lender is redeeming their repayments, they are receiving it from the
Market smart contract. This is a subtle point which differentiates Qoda from a direct peer-to-peer model, and allows for greater capital efficiency! This allows borrowing and lending to be interpreted as inverses of each other. If you lent from a
Market, you can effectively close your loan early by borrowing the same amount (or vice versa, if you were originally borrowing), rather than having to wait the full term for the loan to mature.
Market Factor is a number from 0-100% assigned to every
Market that represents a weighting of how much higher the Qoda collateral system will mark the value of the amount a user has borrowed in that
Market from its current market price, due to the perceived market risk of the underlying token.
Generally, large, liquid, safer
Markets have high
Market Factors, while small, illiquid, risker
Markets have low
Maturity time is the time after which a
Market closes. No
Quotes may be published or accepted after the
Maturity time. This is also the time when borrowers need to repay their loans. By convention, the
Maturity time is set to be the last weekday of the month at 4:00 PM UTC.
Minimum Account Health
Also known as the
Liquidation Ratio. If your
Account Health falls below the minimum the
Minimum Account Health, your account is eligible to be liquidated.
mToken Wrapping / Unwrapping
Users must deposit collateral on Qoda before they can borrow. However, letting users' collateral simply sit inside the Qoda vault doing nothing is capital inefficient. Hence, Qoda gives users the option to allow their collateral to be deposited into Moonwell.fi's money markets to earn interest for them. Qoda will automatically handle the conversion of user collateral into Moonwell's equivalent interest-bearing tokens, as well as automatically handle converting the interest-bearing tokens back to the underlying collateral plus the interest you've accrued when you request for withdrawal.
NOTE: Using external contracts such as Moonwell includes smart contract risk that is outside of the control of the Qoda Protocol. Please make sure you understand all the risks associated with using Moonwell's money markets. Users can always opt out of wrapping their collateral in money markets if they do not wish to do so.
Protocol fees are taken from both lenders and borrowers anytime a loan is executed. The
Protocol Fee is quoted in APR terms and is prorated to the duration of the loan.
Example: Alice loans Bob 100 USDC due in 3 months and the
Protocol Fee is 1% APR. Then, the fee paid in net amount is 1% (3 / 12) 100 = 0.25 USDC, since the loan lasts for 3months.
Market has an associated
qToken, which is minted to a user when they lend to the
qTokens represent the full principal plus interest amount that the user may redeem when the
Market matures. For example:
A user lends 100 GLMR at all-in fixed rate of 10%, expiring on 31 March, 2022. When the transaction is executed, the system will mint 110 qGLMRMAR22 tokens to the user. Upon the expiry of the contract on 31st March 4:00pm UTC, the 110 qGLMRMAR22 tokens will be redeemable for the underlying 110 GLMR tokens at a 1:1 rate.
The advantage of
qTokens is that it allows for greater capital allocation efficiency. While the user can simply hold onto them, the
qTokens themselves hold value and can potentially be traded in secondary markets, staked in yield farms, used as collateral itself in other protocols, etc.
Note that a user may not have an outstanding debt and hold
qTokens at the same time. If a user holding
qTokens borrows in the same
Market, the balance of the loan will be deducted from the
qTokens are transferred to a user with an outstanding loan, the balance of the loan will be deducted first and the user will only receive
qTokens that are in excess of their current borrows.
Quotes are Qoda's version of limit orders to either lend or borrow a particular token for a user-specified size, APR, and maturity date. You can think of
Quotes as an analogue to limit orders in an orderbook. Users can either publish
Quotes into the platform and wait for others to execute against it, or they can browse the list of existing
Quotes and pick the terms that suit their needs.
Repayment Redemption Ratio (RRR)
Qoda adopts a hybrid overcollateralized/undercollateralized loan system. Because a portion of borrowers are undercollateralized, in catastrophic situations there is the possibility of borrower nonpayment. How will redemptions for lenders work in the case of bad debt? In traditional finance, this situation typically triggers a bank run, where lenders all try to redeem at the same time. The first few lucky lenders to redeem can receive 100% of funds, while the late redeemers receive 0%.
Qoda implements a
Repayment Redemption Ratio (RRR) system. The repayment ratio, which is the real-time ratio of total amount that borrowers have repaid divided by the total amount that lenders are owed, is displayed transparently by the protocol at all times. In the event of a borrower default, losses are socialized among lenders to ensure fairness to all users.
The USDCSEP22 market has just expired. Lenders have lent 1,000,000 USDC in total, while borrowers have only repaid 600,000 USDC. The
Repayment Ratiois 60% (600,000 / 1,000,000), so all lenders can redeem only 60% of their qUSDCSEP22 qTokens. If a lender has 100 qUSDCSEP22 qTokens, they will only be able to redeem for 60 USDC. The remaining 40 qUSDCSEP22 qTokens will still remain in their wallet. In the event that borrowers are able to make payment at a later date, they will be able to redeem their remaining 40 qUSDCSEP22 tokens for the underlying USDC.
Risk-Adjusted Borrow Value
Risk-Adjusted Borrow Value is the
Market Factor-adjusted aggregated value in USD (as determined by the current Chainlink oracle price) of all net borrows (i.e. borrows minus lends) across all markets, where each borrowed
Market is adjusted by its corresponding
Market Factor. Important to note is that for any particular
Market, a net positive lend position does not reduce the aggregate
Risk-Adjusted Borrow Value - that is, lending in a
Market is not equivalent to depositing collateral. Lending in a
Market cannot substitute as collateral, it can only net against a positive borrow position in that particular
Note that the
Risk-Adjusted Borrow Value is always greater than or equal to the
Real Borrow Value.
Risk-Adjusted Borrow Value = Borrow Value / Market Factor
Risk-Adjusted Collateral Value
Risk-Adjusted Collateral Value is the
Collateral Factor-adjusted aggregated value in USD (as determined by the current Chainlink oracle price) of all collateral an account has deposited, where each collateral
Asset is adjusted by its corresponding
Collateral Factor. Note that the
Risk-Adjusted Collateral Value is always less than or equal to the
Real Collateral Value.
Risk-Adjusted Collateral Value = Collateral Value * Collateral Factor
Because Qoda implements an orderbook mechanism for loans, it is possible for users to experience slippage when placing quick orders if your order size is large enough. Your final all-in fixed interest rate is the weighted average of the
Quotes you execute against.
Example: You execute a quick order to borrow 50,000 USDC, and the top three live
Lend Quotes in orderbook are 25,000 USDC at 10% APR, 15,000 USDC at 8% APR, and 10,000 USDC at 5% APR, your final APR would be the weighted average of these
Quotes, which is 8.4% APR.
You may stake your QODA tokens anytime to begin earning veQODA. This will lock your QODA tokens inside the staking contract. You may also unstake your QODA tokens at any time to have them returned to your wallet. IMPORTANT: If you unstake your QODA tokens, you will lose ALL your earned veQODA tokens.
veQODA are the unit of measurement for your staking activity in Qoda, inspired by the tokenomics at Platypus Finance. You can begin accruing veQODA by staking and locking your QODA tokens inside the staking contract. The primary motivation for veQODA is to incentivize long-term staking for users, but without explicitly locking users into staking for a minimum period of time. veQODA tokens are special ERC20 tokens with the following properties:
- veQODA reward tokens will accrue in real-time at a rate of 0.00004 veQODA tokens per 1 QODA token staked per block
- There is a max cap of 100 total veQODA rewards total for each 1 QODA staked
- veQODA tokens are non-transferrable from your wallet
- If you unstake your QODA tokens, you wil lose ALL your earned veQODA tokens
Note: Currently, you must manually claim your veQODA tokens when you stake your QODA. You may claim veQODA as often as you wish, up to a per-block basis. veQODA tokens confer the following benefits, proportional to the total supply of veQODA tokens:
- Right to claim issuance of new QODA tokens (QODA staking rewards)
- Right to claim protocol fees, denominated in GLMR (GLMR staking rewards)
- Governance/DAO voting rights
Wrapped Native Tokens
Wrapped native tokens are ERC20 tokens (e.g., WETH, WGLMR, WMOVR) that represents the native token of the network (e.g., ETH, GLMR, MOVR etc) at a 1:1 ratio, allowing the native token to interact with smart contracts and decentralized applications on the network that require ERC20 compliant tokens. This "wrapping" is accomplished by depositing native token into a smart contract, which in return mints an equivalent amount of wrapped native token. This process is reversible, meaning wrapped native tokens can be "unwrapped" back into native tokens. Under the hood, Qoda uses the ERC20 standard for all lending and borrowing actions, including for native tokens, to provide a standardized interface.