Risk Parameters
To guarantee solvency at all times, Kalmar uses excess collateral and a liquidation system for closing positions in danger of becoming undercollateralized. Unlike many DeFi protocols of previous generations, Kalmar uses an aggregated liquidation service with one central smart contract entry point rather than resorting to liquidators having to track individual endangered positions.
The risk framework uses two groups of settings: system-wide (Global Parameters) and individual (Pool-Specific Parameters).
There are five parameters that apply to every position in the Leveraged Yield Farming system. They set the rules for borrowing from the bank and repayments or liquidations for debts to the bank. The parameters are shown in the table below:
Name | Value | Function | Description |
Minimum Debt Size | 0.5 BNB |
| The minimum borrowing amount (if borrowed any) for opening a position. |
Borrowing Interest Rate | 0%-200% |
| Borrower’s interest rate to be paid, accrued per second. |
Reserve pool rate | 20% |
| Portion of borrower’s interest to be stored in bank’s reserve. |
Liquidation bonus | 5% |
| Portion of position value the liquidator gets as an incentive to liquidate positions at risk. |
Reinvest Reward Bounty | 3% | Inside Goblin contract | Incentive reward for bounty hunters calling
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Liquidity borrowed from the Bank can be used in a number of yield farming pools, each with its own liquidity and asset type or asset pair. The risk framework has to account for different volatility levels between assets and pools to guarantee timely liquidation for the loan to stay solvent. This is why debt ratio and liquidation ratio have to be individual, per the tables below:
Name | Value | Function | Description |
Max Debt Ratio | Depends on the pool (see below) |
| Maximum debt ratio when opening/adjusting a position must satisfy. |
Liquidation Debt Ratio | Depends on the pool (see below) |
| Debt ratio threshold. If exceeded, anyone can liquidate the position. |
Farm | Info |
SXP/BNB | Max Debt Ratio: 70% Liquidation Debt Ratio: 80% |
XVS/BNB | Max Debt Ratio: 70% Liquidation Debt Ratio: 80% |
ADA/BNB | Max Debt Ratio: 70% Liquidation Debt Ratio: 80% |
ATOM/BNB | Max Debt Ratio: 70% Liquidation Debt Ratio: 80% |
CAKE/BNB | Max Debt Ratio: 70% Liquidation Debt Ratio: 80% |
BUSD/BNB | Max Debt Ratio: 70% Liquidation Debt Ratio: 80% |
Subjectable to change.
