Borrow Guide
A guideline for loans.
Things to Check Before Loans
Make the asset is available.
The assets currently available at Archi Bank are Archi Dollar (ARCD) and Ether (ETH).
CAT is included in the list of assets but it is paused. It will resumed when Archi Swap's ETH/CAT liquidity pool becomes large enough to support CAT price fluctuations.
Check to see if the deposited assets are collateralized.
Select the collateral asset if there are multiple assets deposited. Cancel if you do not want to use it when liquidating.
Check the utilization of the borrowing limit.
60% is suitable if you are not a fan of liquidation risk.
Things to Check During Loans
Input the amount you want to borrow and check the following.
Check the changed utilization of the borrowing limit.
60% is suitable if you are not a fan of liquidation risk.
Check the utilization rate and the expected interest rate.
The expected interest rate varies depending on the utilization rate. The interest rates rises sharply when the utilization exceeds 80%. Make sure your post-loan utilization doesn't exceed 70% if you are not willing to pay an excessively high-interest rate on someone else's loan after getting a loan.
Precautions After Loans
Be careful of sudden price drops of collateral coins or rapid price increases of borrowed coins.
If the utilization of the borrowing limit is high, there are risks of liquidation due to price fluctuations.
Archi Bank temporarily pauses loans and liquidation if CAT prices fluctuate by 30% compared to the previous day. It is resumed after seeing market conditions. This cannot exceed a maximum of one day.
Check the liquidation rate.
If the liquidation rate is 100% and if insolvency occurs (the value of the loan is greater than the collateral)—the liquidator can liquidate the entire loan as long as there is enough collateral to be foreclosed.
For example—when the collateral value is 1000 KRW, and the loan value becomes 1001 KRW—not 1 KRW but 1001 KRW is liquidated if the collateral is sufficient.
Pay attention to liquidation as the current Archi Bank liquidation rate is set at 100% When liquidation occurs—the liquidator will foreclose and take the collateral at 90% of the asset price at the time of liquidation.
The utilization of the borrowing limit must be managed so that the loan is not subject to liquidation.
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