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Interest Share Adjustment

For all lending platforms, the adjustment of interest rates is closely related to the usage rate. The higher the usage rate, the higher the borrowing interest. However, relying on traditional interest rate adjustments can lead to a decrease in usage rate and lower supply interest. Moreover, Archi Finance is different from other traditional lending platforms. Degen farmers over-collateralize and deposit funds in Perp DEX through delta hedging. Unlike traditional methods of deducting interest from collateral (affecting the proportion in the position), the interest earned by degen farmers will be shared with passive liquidity providers in proportion. Furthermore, when degen users purchase assets like GLP, they also bear high GLP fees.
Therefore, to ensure the common interests of degen farmers and liquidity providers, we have introduced the following rules:
  1. 1.
    When degen users borrow, if the utilization rate of the passive pool exceeds 80%, borrowing is not allowed to maintain the health of the passive pool.
  2. 2.
    Under normal circumstances, the interest share ratio for Archi Finance is fixed at 50%:50%. However, if liquidity providers withdraw and consistently increase the usage rate to 99%, the interest share will be adjusted. The adjustment works as follows:
    • The interest share increases by 5% every 3 days, with the adjustment time set at UTC 12:00 on the same day.
    • The maximum interest share ratio is 20%:80%.
    • Once the usage rate drops below 90%, the interest share reverts back to 50%:50%.
To encourage new deposits, Archi Finance will extract tokens from the treasury as rewards.
Archi Finance is continuously seeking new high-interest Perp DEXes to attract more liquidity as the higher the interest for degen users, the higher the interest for passive users.
Effective date: 8th June 2023.