RUJI Lending - Money Market

Q: What is RUJI Lending? RUJI Lending is our decentralized money market where you can lend or borrow crypto assets. Lenders earn interest on their tokens, while borrowers can use their crypto as collateral* to take loans.

You can access it via:

• Lending: rujira.network/strategies

• Borrowing: rujira.network/borrow

For a full overview, visit our RUJI Lending docs.

*Collateral: crypto you lock up as security for your loan.

Q: What are CDP loans? CDP stands for Collateralized Debt Position. It is a way to borrow crypto by locking up other crypto as collateral, and it is always overcollateralized, meaning you must deposit more value than you borrow.

Here is how it works:

• You deposit crypto like BTC, ETH, or XRP (this is your collateral).

• Each collateral type has a corresponding collateral ratio, which is a risk-adjusting factor applied to your collateral value to define how much you can borrow against it. For example, BTC has a collateral ratio of 70%, meaning you can borrow up to $70 for every $100 worth of BTC.

• You borrow a different token, or stablecoin* such as USDC or USDT.

• Your loan stays open as long as your adjusted collateral value remains above the value of your debt.

• If your collateral value drops too much, it can be partially liquidated (sold via a market order) to repay part of the debt and bring the position back at a safe level.

*Stablecoin: a crypto token that aims at keeping a fixed value, often linked to the US dollar.

Q: How is the interest rate decided? The interest rate changes depending on how much of an asset is already borrowed. If most of the asset in the vault is borrowed (high utilization rate*), the interest rate goes up. If more assets get added to the vault, or loaned assets are returned, the rate goes down.

*Utilization rate: how much of the total available supply in the vault is currently borrowed.

Q: Who am I borrowing from? You borrow from other users who have deposited their assets into lending vaults. Every token you borrow comes from users who chose to lend them out. The interest you pay goes directly to those lenders (minus 10% protocol fee) and is distributed pro-rata their share of the total deposits.

Q: What is Collateral Ratio, Adjusted LTV, and Liquidation Price?

• Collateral Ratio: risk-adjusting factor applied to the value of your collateral to define how much you can borrow against it. For example, BTC has a collateral ratio of 70%, meaning you can borrow up to $70 for every $100 worth of BTC.

• Adjusted LTV (Loan-to-Value): shows how much you borrowed compared to your adjusted collateral’s value. If your Adjusted LTV reaches 100%, your position becomes at risk and will start being liquidated.

• Liquidation Price: the price where your collateral would start to be sold to repay your loan and protect the system solvency.

Q: What happens if my loan gets liquidated? If liquidation happens, your collateral is partially sold on RUJI Trade, our orderbook DEX. The proceeds from that sale is used to repay part of your loan till your position gets back to a safe Adjusted LTV (i.e. <100%).

Q: What is a collateral swap? Collateral swaps are a special Rujira feature that lets you swap your locked collateral without closing your loan.

For example, if you borrowed USDC using BTC as collateral, you can swap your BTC for another token directly, without repaying the loan first.