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Lending & Borrowing
For each asset that Aries Markets supports, it has the following parameters:
LTV is the fraction of the dollar value of collateral that users can use to borrow.
An 80% LTV means that 100 USD worth of collateral can be used to borrow max 80 USD worth of loan.
Liquidation threshold is the ratio between the borrow amount and the collateral value at which the users are subject to liquidation.
A 75% liquidation threshold means that if the value rises above 75% of the collateral, the position is under-collateralized and could be liquidated.
Specifically, say that a user deposit 100 USD worth of APT and borrow 70 USD worth of assets, according to the current liquidation threshold of 75%, the user is subject to liquidation if the value of the assets that they borrow has increased to 75 USD.
For each account, the liquidation threshold is calculated as the weighted average of the liquidation thresholds of the collateral assets and their value.
Liquidation Bonus is the extra amount of collateral that the liquidator will get for taking the risk of liquidating the users.
The fee percentage that is charged for the flash loan.
For each account users opened, it has the following parameters
Borrowing Power is the total value of assets you are able to borrow with your current deposit (in USD).
Available borrowing power is the total borrowing power subtracts the risk adjusted borrowing value
The total risk adjusted borrow value at which your account is subject to liquidation
When the risk of your account exceeds 100%, your account will be subject to liquidation.