Collateral Value
In FilUs, the collateral value plays a critical role in determining the borrowing capacity for Storage Providers (SPs). It ensures that loans are backed by sufficient collateral, minimizing the risk
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In FilUs, the collateral value plays a critical role in determining the borrowing capacity for Storage Providers (SPs). It ensures that loans are backed by sufficient collateral, minimizing the risk
Last updated
The total collateral value is calculated with the following formula:
The Fixed Liquidation Value represents the portion of the collateral that is determined by the SP's initial pledge, minus any potential termination values. This is a more stable, predefined value that provides security for loans.
Total Initial Pledge: The amount initially pledged by the SP to the network as collateral for sealing sectors.
Total Termination Value: Any deductions or penalties from failed or terminated sectors.
The Flexible Balance accounts for the current liquidity available to the SP and their future expected income. This dynamic portion reflects both the immediate financial standing of the SP and their projected revenue from ongoing storage deals.
Current Available Balance: The amount of FIL currently available to the SP.
Future Income: Expected earnings from active storage deals, ongoing mining rewards, and incoming FIL from the locked balance that gradually becomes available as storage rewards are unlocked.
Example of Flexible Balance Calculation:
When a Storage Provider (SP) initially registers with FilUs, the Future Income component of their Flexible Balance is set to 0 FIL. Over time, however, this balance grows as various revenue streams accumulate:
Mining Rewards: As the SP participates in mining activities, they begin earning periodic FIL rewards, which add to their Future Income. For instance, if they earn 5 FIL from mining each month, this amount is added to their Flexible Balance.
Locked Balance Release: As storage deals mature and the locked balance gradually unlocks, these amounts become available to the SP. For example, if 10 FIL from the locked balance is released after each storage contract milestone, this too adds to the Future Income.
Over time, these components combine to increase the SP's Flexible Balance, enhancing their collateral and allowing them greater borrowing capacity within the FilUs protocol.
By combining both fixed and flexible components, FilUs ensures that SPs have sufficient collateral to cover their loans, reducing risk for the protocol and ensuring the liquidity pool remains protected.