Protocol Parameters

Collateral Factor, Reserve Factor, Close Factor, and Liquidation Incentive

Collateral Factor
  • The maximum that can be borrowed on a particular asset e.g. MOVR collateral factor is 40%, if the price of MOVR is $100, the maximum that can be borrowed is $40 in other assets. (Example)
Reserve Factor
  • The percentage of the borrower's interest that accrues to the MoonLend protocol and can be withdrawn through governance e.g. reserve factor of 20% means that 20% of the interest paid on the asset is for the protocol.
Close Factor
  • The maximum amount that can be liquidated in a single transaction e.g. 50% close factor means that a maximum of 50% of a liquidatable account's borrow can be repaid in a single liquidate transaction.
Liquidation Incentive
  • The incentive that is given to liquidators to perform liquidations and keeping the protocol solvent e.g. liquidation incentive of 10% means that liquidators will receive an extra 10% of the borrower's collateral for liquidate transactions.