Ribbon Finance
  • Introduction to Ribbon Finance
  • Aevo
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    • Introduction to Theta Vaults
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      • How to deposit
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  • RIBBON EARN
    • Introduction to Ribbon Earn
    • Ribbon Earn USDC
      • Risk-Free Rate
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      • Vault specifications
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      • What is a dolphin strategy?
      • Vault specifications
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  • RIBBON LEND
    • Introduction to Ribbon Lend
      • Yields from unsecured lending
      • No lockups
        • Pool status
        • Default
      • Off-chain enforcement / credit underwriting
      • Built-in insurance
      • Fees
  • ribbon treasury
    • Introduction to Ribbon Treasury
      • Why Ribbon Treasury?
      • Partners
      • How to get involved
  • Ribbonomics
    • Overview and RBN tokenomics
      • Vote-Escrowed RBN
      • Fee Collection and Distribution
      • Liquidity Gauges and RBN Emissions
      • Gauge Weight Voting
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        • Guide to Boost Bribing
          • For Bribers
          • For veRBN Holders
      • Upgrades
    • How to lock RBN, boost and claim protocol revenues
  • Developers
    • Deployed Contracts
    • Ribbon Subgraph
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  1. RIBBON LEND
  2. Introduction to Ribbon Lend
  3. No lockups

Pool status

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Last updated 2 years ago

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Each pool is characterized by a utilization status, based on the utilization rate:

Utilization rate
Pool Status
Time Limit

<95%

Active

ꝏ

>95%

Warning

Until utilization = 99% or <95%

99%

Provisional Default

120 Hours

Each status corresponds to possible actions by lenders and borrowers:

  • ACTIVE: Lenders: can deposit and withdraw; Borrower: can draw liquidity and repay.

  • WARNING: Lenders: can deposit and withdraw; Borrower: can only repay. Interest will continue to accrue.

  • PROVISIONAL DEFAULT: Lenders: deposit and withdrawals are blocked; Borrower: has 120 hours to deposit and get the utilization rate under 95%

If past 120 hours the borrower has not brought the utilization rate below 95 percent, the pool will go into .

Utilization curve

The relationship between interest rates and pool utilization rates follow curves set by the Team, based on prevailing CeFi lending rates to market makers.

  • The curve has its lowest interest rate (Ym) at utilization (Xm) in order to achieve optimal utilization and capital efficiency;

  • The curve discourages utilization in lower and extreme high ranges;

  • The borrow APR steadily decreases with utilization from X0 to Xm. This compensates lenders who maintain funds within the pool with a more favorable interest rate when the borrower utilization rate is below optimal;

  • Concurrently the curve increases sharply from Xm to X1, discouraging high utilization. This design reinforces the exit liquidity available for lenders even when utilization is optimal;

  • During periods of volatility where liquidity withdrawal rates are higher, utilization/interest rates will peak, incentivising borrowers to reduce utilization in order to avoid higher interest rates. Higher interest rates may also attract new lenders to the pool.

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