The Kopi Money Market

In the dynamic world of cryptocurrency, individuals often find themselves in situations where they possess digital assets and require liquidity without the desire to liquidate their holdings into stablecoins. Conversely, some users may have an abundance of stablecoins without an immediate need for them. The Kopi Money Market is a convergence point for these two distinct user groups.

Providing Collateral

For users seeking to obtain loans, the preliminary step involves depostiting collateral comprised of cryptocurrency assets. The loan amount a user is eligible for is determined by the value of the pledged crypto assets and their respective currencies. The Loan-To-Value (LTV) ratio is a crucial metric; for instance, if users deposit $100 worth of a token with an LTV of 50%, they are entitled to a loan of up to $50. To deposit collateral, users navigate to the Borrowing page, which displays a comprehensive list of eligible collateral assets detailing the amount that is deposited, its equivalent value in USD, the LTV ratio of each currency, and its price in USD. Users can specify the amount of collateral they wish to contribute by selecting the Provide option.

Taking Loans

Upon a successful deposit, users can initiate their first loan through the Borrowable Assets section on the Borrowing page. This segment lists all assets available for borrowing, including the available quantity, the amount previously borrowed by the user, the value of the borrowed amount in USD, and the prevailing loan interest rate. Selecting the Borrow option presents users with the feasible borrowing amount, which reflects the quantity of that specific currency available for lending and the total collateral provided. Additionally, it outlines the credit line utilisation, indicating the proportion of the available borrowing limit that the user has utilised based on their deposit. The disbursed loan is immediately credited to the user's wallet, and the Borrowable Assets table updates in real-time to reflect the newly borrowed amount and the applicable interest rate. Under My Statistics, users can review their total borrowed sum and the worth of their collateral. Credit line utilisation now includes the total loan value relative to the collateral value. Post-borrowing, withdrawing all collateral is restricted to ensure sufficient backing for the outstanding loans. Maximising collateral withdrawal signifies approaching the borrowing limit.

Liquidations

Should users exceed their borrowing capacity due to accruing interest or depreciating collateral, a portion of their collateral is automatically liquidated to repay the loan at the prevailing market rate. Although liquidation carries no penalty, it is advisable to pre-emptively manage the risk of liquidation through additional collateral deposits or loan repayment. Loan repayments are facilitated via the Repay button on the Borrowable Assets page. Users can clear partial or complete loan amounts. If the repayment exceeds the loan's value, the surplus is refunded to the user.