DEFINITION AND JUSTIFICATION OF THE PARAMETERS OF THE DeFi COLLATERAL PROTOCOL AND CONDITIONS FOR LIQUIDATION OF THE COLLATERAL POSITION

Анотація

A general approach to determining the parameters of a collateralized protocol is considered, along with the development of an appropriate mathematical framework that accounts for all major risks. The following tasks are addressed: all key factors that traditionally affect an asset’s price and the size of payouts during the position liquidation procedure are identified; risks are incorporated and their potential impact on the price is assessed; the statistical data that must be collected and processed to obtain numerical characteristics of these risks are specified; relevant statistical data are collected across various decentralized platforms and, based on them, a liquidation condition for a collateral position is formulated and justified; the LTV value is determined and substantiated; numerical results for LTV are obtained for different pairs of assets. Keywords: cryptoassets, DeFi-protocols, collateral protocols, loan-to-value (LTV), liquidation condition.

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