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?

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