Borrowing Capacity

The sum of weighted collateral values determined by various Collateral Factors represents the maximum borrowing capacity.

Assume that the maximum borrowing amount (in USD) of a user is V𝑑𝑚 which is calculated by the following formula.

Where:

Vdi: USD value of deposit asset i

DFj: Deposit factor of asset i

Vbj: USD value of borrowed asset j

BFj: Borrow factor of asset j

Based on Patronus' risk control regulations (embodied in the Deposit factor and Borrow factor), the volatility risk of the pre-borrowed token needs to be considered when specifying the amount that can be borrowed in a particular token.

Therefore, the formula for calculating 𝑉𝑥 assuming that the user has a borrowable amount (in USD) in a particular token is as follows.

Where:

BFx: Borrow factor of asset x