Borrower Onboarding
The following outlines the process for onboarding as a Borrower to borrow from Cap.
1. Requirements
Borrower Address: A valid Ethereum address (EOA or multisig) to borrow
Underwriter: Entity that provides credit for the Borrower. The list of current Underwriters can be found here.
Borrower Parameters:
Underwriting Premium: Fixed premium rate on the amount borrowed
LTV: Loan-to-Value ratio for initial maximum borrow capacity
Protocol Whitelisting: The Borrower must be whitelisted by the system.
A Borrower may only use one Ethereum address per Underwriter and collateral pair. They must generate a new address for each new Underwriter. Addresses cannot be changed after deployment. For best practices, we recommend using a multisig for the address.
2. Register to a SSN of choice
Currently, Cap supports the following Shared Security Networks.
3. Complete Legal Agreements (Optional)
Borrowers and Underwriters may enter into legal agreements outlining terms of delegation, responsibilities, and compliance.
4. Participate in Loan Activity
Once coverage is active from the respective shared security network, Borrowers can participate in borrowing activity directly from Cap's application using the Borrower's address.
Review the risk parameters prior to loan:
LTV (Loan-to-Value): Maximum borrowing capacity (e.g., 50% = 0.5e27)
Maximum Borrow Amount: Coverage x LTV
Liquidation Threshold: Health factor at which liquidation can occur (e.g., 80% = 0.8e27)
LTV Buffer: Minimum gap between LTV and liquidation threshold (10% = 0.05e27)
While the liquidation threshold is a global parameter, the LTV can be set by the Borrower-Underwriter Pair
5. Updating Parameters
To update the Underwriting Premium or the LTV for the Borrower, request a change to the Cap team.
Namely, the underwriting premium can be updated via the setRestakerRate function, and the LTV and LT via the modifyAgent function.
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