Protocol Parameters

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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• The percentage of the borrower's interest that accrues to the MoonLend protocol and can be withdrawn through governance e.g. reserve factor of 20% means that 20% of the interest paid on the asset is for the protocol.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.