Collateral and Reserve Factor
ReactorFusion implements the collateral and reserve mechanic implemented by Compound Finance.
rfTokens have a collateral factor that can range from between 0-90%, and represents the proportionate increase in liquidity (borrow limit) that an account receives by minting the rfToken.
Large or liquid assets tend to have high collateral factors; whereas smaller or more illiquid assets will tend to have lower collateral factors. If an asset has a 0% collateral factor, it cannot be used as collateral (or seized in a forced liquidation event). However, the asset can still be borrowed.
In summary, the Collateral Factor is the maximum you can borrow against a particular asset.
Example: if the collateral factor for USDC is 75%, the maximum amount of USDC you would be able to borrow in other assets (assuming a deposit of 1000 USDC) would be $750.
zkSyncEra
Token | Collateral Factor | Reserve Factor |
---|---|---|
ETH | 80% | 80% |
WBTC | 80% | 80% |
USDC | 85% | 80% |
USDT | 85% | 80% |
Telos
Token | Collateral Factor | Reserve Factor |
---|---|---|
TLOS | 70% | 50% |
ETH | 70% | 40% |
USDC | 80% | 30% |
USDT | 80% | 30% |
Collateral factors, and/or reserve factors, may be adjusted from time to time, depending on factors such as the liquidity for a particular asset.
Last updated