Policy Rules

Rules enforced by our smart contracts and backend

Introduction

The following rules will be enforced by a combination of on-chain contracts and backend monitoring and action tasks.

As they mature and stabilize, they will evolve into more onchain mechanisms.

Policy Rules

• We always deposit AMOUNT_PROMISED divided by NUM_DISBURSEMENTS converted to collateral if LTV_PROTECT is breached, until the full amount is disbursed or the policy expires.

• We always foreclose if at risk of lending protocol liquidation.

• In all cases, including foreclosure; the lending protocol is honored, the amount owed to us is honored; and the remaining value stays for the user.

• When the policy expires, depending on the LTV level:

  • We foreclose, we liquidate everything, we pay ourselves back, and give the remainder to the user in stables.

  • We auto-repay ourselves using collateral sale and keep the users position open.

  • We auto-repay ourselves using more borrowing and keep the users position open.

• If variation OCL is selected, we also foreclose if at risk of incurring losses on our loan.

• Once a policy is active, the user can only deposit more collateral. All other changes to the position are not allowed unless canceling the policy.