SmartLTV Monitor for Kinza Finance is Live
Kinza fortifies its economic security with B.Protocol’s SmartLTV automated risk management monitor tracking its risk level exposure.
Tl;Dr
We are happy to share that the SmartLTV monitor dashboard for Kinza Finance, the 2nd biggest lending platform on BNB Chain, is now live at — https://kinza.bprotocol.org/.
The monitor tracks the risk levels of each market on Kinza Finance and presents risk level historical data next to the main risk parameters of each market such as its current LTV, supply and borrow caps, asset volatility, and DEX liquidity.
The new monitor fortifies Kinza’s economic security and adds transparency to its risk management processes. By using B.Protocol’s SmartLTV formula it automatically calculates the risk levels based on objective and quantitative on-chain risk-related data feeds, helping users to make better risk-aware decisions.
In this post, we will go briefly through the different sections of the monitor dashboard to explain its main features.
SmartLTV and the Risk Level Recap
Loan-To-Value (LTV) is a pivotal concept in maintaining the equilibrium between risk and accessibility. It’s a measure that ensures that lending platforms can provide loans securely without taking undue risk that might result in the accumulation of bad debt.
SmartLTV is a smart contract formula that offers a simplified yet robust method for LTV ratio calculations based on quantitative data, minimizing the human factor in the process.
The formula takes into account the following market parameters:
- σ is the price volatility between the collateral and debt asset (normalized to the base asset price).
- β is the liquidation bonus.
- ℓ is the available dex liquidity with a slippage of β.
- d is the debt cap of the borrowable asset.
- r is a risk level factor. The higher the r is, the odds for insolvency increase.
If the LTV is set, one can isolate the risk factor and use it to compare risk exposure levels of different markets, creating a risk level index.
The Risk Level Index introduces a standard for assessing economic risk in DeFi lending markets. It functions as a benchmark, quantifying risk exposure in lending markets by aggregating diverse market metrics such as DEX liquidity and asset price volatility, together with platform-specific parameters such as liquidation bonus and debt caps, into a single numerical value. This index serves as a comparison tool, allowing users to assess and compare risk levels across different lending markets. Additionally, it provides historical tracking, enabling stakeholders to monitor changes in risk exposure over time. The standardized measurement simplifies risk assessment and historical analysis for a wide range of DeFi lending participants.
Overview
The Overview section in the monitor dashboard presents Kinza markets’ base assets, sorted by risk levels from high to low.
For each base asset, the monitor tracks the risk level for each of its existing markets on Kinza, presenting also the main risk parameters next to it. Here as well, the markets are sorted by risk levels from high to low.
Clicking on an asset pair will direct you to this market’s Risk Level page.
Risk Levels
This section shows the risk level historical data for each asset pair, as well as the aggregated DEX liquidity and asset price volatility.
The default data shown is calculated based on the current LTV and caps parameters set by Kinza to this market (using the lower between the supply and borrow caps). Users can change the LTV and/or cap to simulate new risk levels. This feature can be used to maintain the same risk level by setting new LTV ratio or borrow/supply caps in case market conditions change significantly. Note that the LTV can’t be set over a threshold determined by the liquidation bonus for that asset.
The liquidity and volatility data is also presented over the last 180 days and the liquidity is calculated based on a max slippage percentage set by the platform’s liquidation bonus, as liquidations won’t be profitable and won’t be executed above this rate. You can read more about that on the SmartLTV whitepaper.
Data Sources
This section monitors the liquidity and volatility for each market, filtered by the DEXs used as a source of the data fetched for the SmartLTV formula calculations. Users can pick a specific DEX or get an aggregated view of all the DEXs listed. Users can pick a slippage percentage to be used for the liquidity calculation over time.
The Last Update section on the monitor dashboard shows the last time the data was fetched and helps to verify the data used is updated. Under the Learn More section users will find explanations and links to more info on the SmartLTV formula and the risk levels.
For any questions or feedback feel free to reach out to the B.Protocol team over our social channels — X (Twitter), or Discord.
About Kinza
Kinza Finance is an innovative decentralized lending protocol on BNB, and opBNB Chain. Kinza Finance is non-custodial, permissionless, secure, and incorporates cutting-edge DeFi mechanisms and solutions to offer users a flexible and highly customizable DeFi lending experience. As a standout Binance Accelerator Program project from the Binance MVB Accelerator Program (Season 6), Kinza received a direct Binance Labs investment and has developed from testnet to over $200 Million TVL on the Kinza Finance mainnet app.kinza.finance within 6 months. In addition to being the first lending protocol to deploy on opBNB, Kinza Finance is developing unparalleled support for LRT’s and cutting-edge DeFi opportunities.
Website, Twitter, Discord, Medium, Kinza dAPP
About B.Protocol
B.Protocol has been building open-source protocols and infrastructure for risk mitigation and assessment for the DeFi ecosystem since 2020. Through our research arm, RiskDAO, and its novel risk framework, we have supported over a dozen DeFi protocols with risk analysis, research, audits, and monitoring. Our Risk Oracle, together with the SmartLTV formula, and the Risk Level Index automate the process of setting risk parameters for lending platforms in a transparent way, building the next generation of DeFi risk management infrastructure.
