Dinero Markets allow users to borrow Dinero using cryptocurrencies as collateral. The loans have no maturity as long as the user remains below the maximum loan-to-value ratio determined by the market.
The loan-to-value ratio determines the minimum amount of collateral a user must have to cover his current loan + the interest rate accrued over time in Dinero.
Loan-To-Value Ratio = Loan in USD / Collateral in USD
Let us assume that the Bitcoin Dinero Market has a loan-to-value ratio of 50%. It means that for every 1 dollar of Dinero borrowed, the user must have 2 dollars of Bitcoin as collateral. Liquidations occur when the price of BTC drops, increasing the loan-to-value ratio above the threshold. Any other user on the platform can liquidate your loan if this happens. Essentially, the liquidator will use your collateral to repay the loan for a reward. The liquidated entity pays a penalty fee for failing to maintain a healthy LTV ratio.
Dinero Markets support Liquidity Providers tokens. When the collateral is an LP token, the contract deposits them in the associated farm to ensure that the user is earning rewards while borrowing.
The cost of borrowing Dinero when using LP Tokens as collateral is always lower than the rewards from the farm. This makes Dinero Markets profitable for Liquidity Providers.
- 1.When turned on, it displays the markets from which the user is currently borrowing Dinero.
- 2.It sorts the markets by the following parameters:
- Interest Rate
- Liquidation Fee
- 3.It allows a user to find a market by the collateral name, symbol or address
- 4.The icon and symbol of the token the market accepts as collateral.
- 5.The total value of the collateral deposited in a market in USD.
- 6.The amount of Dinero the user is currently borrowing.
- 7.The maximum loan to value ratio the market allows before a position is considered under water.
- 8.The annual cost of borrowing Dinero. it is expressed as an annual percentage.
- 9.The penalty fee charged on positions under water.
- 10.It opens the market selected.
After pressing the Enter button, a user will be directed to a specific market and see the interface below.
Do not get overwhelmed by the information on this page. We will break it all down for you. This page has two modes: borrow and repay, as implied by the switch on the top of the page.
- The borrow mode allows a user to deposit collateral and borrow Dinero.
- The repay mode enables a user to repay the borrowed amount in Dinero and withdraw the collateral.
Deposit and Borrow UI
- 1.This button allows you to select the maximum amount of collateral you can deposit. This is essentially your current balance.
- 2.It indicates your current balance of collateral tokens.
- 3.It is the amount you wish to deposit in this market as collateral.
- 4.The amount of collateral you wish to deposit in USD.
- 5.It indicates the maximum amount of Dinero you can borrow. This value considers the amount of collateral you have already deposited and the new amount you wish to deposit.
- 1.It is a shortcut to select a desired LTV for the entire position. It considers your current position and the new desired amounts added to the inputs above.
- 2.All the Dinero markets have a cap on how much Dinero they can loan out. This shows the remaining amount left.
- 3.It shows how much Dinero you owe to the market. This considers the new desired borrow amount added above.
- 4.This estimates the collateral price in USD, which will cause your position to be liquidated. You want this value to be much lower than the current price.
- 5.Position health is a metric from 0% to 100%. At 0%, you are at risk of being liquidated.
- 6.This button will become blue and describe the desired action if the user adds value to the deposit or borrow inputs.
This panel shows the current balance of the relevant tokens for this market. The BNB-USDT market allows deposits in BNB-USDT, loans in Dinero, and pays rewards in Interest Token.
This panel represents the amount of risk your current loan is in. We advise it to keep below 50%. At 100%, you are at risk of liquidation, and the bar will turn red.
This is the summary of your current loan.
- 1.The number of tokens you have deposited in the market.
- 2.The value of the deposited collateral is in USD.
- 3.The number of Dinero tokens you owe to the market. This number includes the interest rate cost as well.
- 4.The estimated price in USD of the collateral that will cause your position to be liquidated.
- 5.The amount of Dinero tokens you can still borrow considering your collateral.
- 6.The number of collateral tokens you can withdraw without repaying your current loan.
- 7.The current price of Dinero and the collateral token are in USD.
This panel displays important information about the loan and rewards (if applicable).
- 1.The loan-to-value ratio. A value of 40% indicates that for every 40 cents borrowed, the user must have 1 dollar in collateral.
- 2.The penalty fee borrowers will incur if their positions get liquidated.
- 3.The annual interest rate cost of the loan. Some markets will have no cost, which will be indicated by N/A (Not applicable).
- 4.The current rate of rewards of this market in USD is paid in Interest Tokens.
- 5.The current number of Interest Tokens earned by the borrower.
- 6.The value of the Interest Tokens earned in USD. This is the current spot price in the DEX.
The difference between the borrow and repay mode is in the panel below. If you switch to repay, the inputs will update to:
- 1.It allows the user to select how much Dinero he wishes to repay.
- 2.It allows the user to withdraw his collateral. Please note that the maximum amount considers your current loan position and desired amount to repay.
- 3.This allows you to select a % of your current Dinero Balance you wish to use to repay the loan. Once again, feel free to put 100% as the contract will not overcharge you. The owed amount is updated every second, so we advise you to select an amount higher than what you currently owe to repay the loan entirely.