Paribus is a decentralized finance (DeFi) protocol that facilitates the lending and borrowing of diverse cryptocurrency assets on its platform. In this context, I will define and explain important terms which are crucial for any user looking to participate in Paribus’ borrowing and lending activities.
- Asset: In the context of a crypto project that allows borrowing and lending of assets, an asset refers to a digital currency or token that can be used as collateral for borrowing or lent to earn interest. For example, Ethereum, or stablecoins like USDT or USDC.
- Net APY: Net Annual Percentage Yield (APY) is the rate of return earned on an investment over one year, taking into account compounding interest. In the context of a crypto project that allows the borrowing and lending of assets, Net APY is the annual interest rate that is earned or paid after taking into account any fees or expenses. It is the difference between the Deposit APY and the Borrowed APY.
- Borrow Limit: The Borrow Limit is the maximum amount of funds a user can borrow against their collateral. This limit is determined by factors such as the market size, the user’s collateral value, and the loan-to-value (LTV) ratio. The LTV ratio is the ratio of the value of the collateral to the amount borrowed.
- Market Size: The Market Size refers to the total amount of assets that are available to be lent or borrowed on the platform. It is an important metric for understanding the liquidity of the platform and the potential demand for borrowing or lending.
- Total Borrowed: Total Borrowed is the sum of all the funds that have been borrowed by users on the platform. It is an important metric for understanding the usage of the platform and the demand for borrowing.
- Deposit Balance: Deposit balance is the total amount of funds that a user has deposited on the Paribus platform and is currently available for lending. Users can withdraw their deposits at any time, subject to any applicable fees or penalties.
- Borrow Balance: Borrow balance is the total amount of funds that a user has borrowed on the Paribus platform and is currently outstanding. Borrowers are required to repay their loans, typically with interest, within a specified timeframe.
- Interest Paid: Interest paid is the total amount of interest paid by borrowers on the Paribus platform over a given period of time. This figure can give an indication of the cost of borrowing and the overall profitability of the platform for lenders.
- Deposit APY: Deposit APY is the annual interest rate that is earned on assets that are deposited on the platform. Users can earn interest by lending their assets to borrowers.
- Borrowed APY: Borrowed APY is the annual interest rate that is charged on the funds that are borrowed from the platform. Borrowers must pay interest on the amount they borrow.
- Total Interest Accrued: Total Interest Accrued is the sum of all the interest that has been earned or paid on the platform. It is an important metric for understanding the profitability of the platform and the value that is being generated for users.
- Total Collateral Value: The total value of all the assets that a user has deposited as collateral on the platform. The collateral value is used to determine the user’s borrowing limit and the amount of interest they pay on their borrowed assets.
About Paribus
Paribus is a lending and borrowing platform built on the Cardano blockchain that allows users to utilize both traditional and unconventional cryptocurrencies. This platform allows users to have access to liquidity and participate in markets without liquidating their assets.
Keep in touch with Paribus by following:
