Liquidity Repayment

Liquidity Repayment involves customers returning funds to the MasterPool, settling any outstanding amounts.
Customers who wish to repay liquidity have the flexibility to make full or partial repayments at any time. This feature not only grants our customers a high level of flexibility but also reduces the capital intensity they experience. Addressing this issue is one of our primary objectives. Moreover, this repayment structure enables us to deploy capital efficiently to customers in need, ensuring optimal utilization of our depositor’s resources. When a repayment occurs, funds are transferred from the borrower’s account into the MasterPool, and the system is updated to reflect the transaction.
Liquidity Repayment
The protocol utilizes the following equations to update the system upon liquidity repayment initiation. The first equation decreases the total amount of liquidity borrowed by the size of the liquidity principal being repaid in a repayment. The second equation updates the aggregated weighted-average interest rate as a result of a new liquidity request.

Repayment Cycles

Repayment amounts are rounded up to align with a full 24-hour cycle. For example, if a liquidity loan has been active for 6.2 days, the repayment amount will be calculated based on a 7-day repayment period. Once a 24-hour cycle has passed, the repayment amount will be rounded up to complete the next 24-hour cycle. This approach ensures stability in repayment amounts and aids our customers in their financial planning by providing predictability and consistency in their repayment schedules.

Full / Partial Repayments

When a full, or partial repayment is made, the repayment will reduce both the outstanding interest, and outstanding liquidity principal. For example, a liquidity request of 100 has an outstanding interest balance of 2, resulting in a total repayment amount of 102. A partial repayment of 51 will reduce the liquidity loan by 50, and the outstanding interest by 1, such that the total outstanding repayment amount is now 51.