GovernanceGithubPortal

FAQs

How can I earn money with ARTH Loans?

Although the primary use case of ARTH Loans is not generating revenue, instead, it is for users to take out seamless loans in a stable valuecoin, that is resistant to inflation. DeFi users, however, can generate revenue via:

  • Liquidating low CR% loans

  • Depositing ARTH valuecoin to the Stability Pool to earn liquidation rewards. Stability Pools always give net positive rewards over time

  • Participate in various staking/LP pools with partner projects and earn rewards in MAHA and partner tokens

Pre-requisites for taking out a loan?

  • Metamask or any web3 compatible wallet installed.

  • Collaterals in the form of the native blockchain token (ETH).

Pre-requisites for becoming a Stability Provider?

To become a Stability Provider, you need ARTH.

ARTH can be borrowed by putting in collateral in the form of opening a loan position. Alternatively, you can also buy ARTH from the open market directly from a DEX.

What is the gas fee compensation?

To make liquidations profitable, the borrower needs to keep away a gas fee compensation at the time of borrowing ARTH. The current gas fee compensation is 5 ARTH (or roughly $10) on PoS chains and roughly 50 ARTH on the ETH chain

What is the minimum requirement to create a loan position?

A borrower can only take out a loan, by creating a debt position of not less than 50 ARTH on PoS chains and 250 ARTH on the ETH chain.

Who can liquidate a loan position?

Almost anybody can liquidate a loan position.

The requirement to liquidate a loan position is simply:

Current Collateralization Ratio < Minimum Collateralization Ratio

Minimum Collateralization Ratio in Normal mode: 110% Minimum Collateralization Ratio in Recovery mode: 150%

For every liquidation, the liquidator will have to pay gas fees. To make sure, liquidations are profitable, a significant gas fee is kept aside at the time of borrowing a loan.

Currently, the gas fee compensation is set at 5 ARTH or $10 acc to the current GMU of $2.

What is the collateralization ratio in Recovery Mode?

The CR in Recovery Mode is 150%. While the CR in normal mode is 110%.

Yes. While the redemption fee remains the same, the borrowing fee is changed to 0% to encourage borrowing in the system.

As a borrower, simply increasing your collateral ratio to >150% will protect you from any liquidations. Thus, you will have to either a) add more collateral or b) repay some debt

Can I be liquidated if my collateral ratio is below 150% in Recovery Mode?

Yes. You will be in line for liquidations if the loans who have a collateral ratio below yours aren't enough to bring the protocol back out of recovery mode.

Any Further Questions?

If you have any further questions, you'd like us to answer

PreviousDeployed AddressesNextHow to Mint ARTH?

Last updated