Introduction to Konomi Ocean Lending
At our March community meeting, members of our team introduced our latest product, Konomi Ocean Lending, to the community. In comparison to current mainstream lending protocols, the main highlights of this product are its complete user-led decentralization and its support for flexible lending in minority currencies. Konomi Ocean Lending consists of a pool of lending funds created by users within the protocol. We will further elaborate below on how the lending process works.
Part 1 — How Can Ocean Owner Create an Asset Pool:
Step 1: Owner enters specific information about the Token to be injected into the liquidity pool, including the Token’s full name, abbreviation, contract address, etc. This information will be verified by the community to ensure the accuracy of the information submitted.
Step 2: After the information verification process, the Owner will set the lending rules for the pool, including setting the interest rate model for the pool, the Collateral Factor, the liquidity incentive, and the Liquidation Incentive for liquidation.
Step 3: The pool will become fully operational after the Owner has staked Kono to determine the term of the pool lease.
Part 2 — Pool Liquidation:
Liquidation is an important part of the lending agreement and Konomi Ocean Lending will recruit an outsider to liquidate. Liquidation will be triggered when the value of a user’s account is less than the liquidation threshold and the outsider will liquidate the user’s collateral below market price based on the Liquidation Incentive value set by the Owner.
Part 3 — Operation of an Asset Pool:
Each participant benefits from their participation in Konomi Ocean Lending. The Supplier, in addition to a liquidity bonus from the pool’s Owner, receives further interest for injecting liquidity into the pool. Borrowers receive a liquidity bonus from Owners in addition to asset liquidity. For Owners, a portion of the Supplier’s interest income will be collected as an administration fee for each loan that occurs. The platform will also charge 1% of the daily interest accrued in each pool as the transaction fee.
Part 4 — Closing the Asset Pool:
Fifteen days before the expiry of the pool’s lease, the owner will have the option to choose whether to continue operating the pool. If the owner decides not to continue operating the pool, the pool will enter the first phase of closure ten days before the expiry of the lease, stopping the entry of new users, i.e., closing the borrow and supply functions. Seven days before the expiry of the lease, the pool will enter the second phase, which will stop the payment of interest to existing supply users, while the interest generated by borrowing users will be calculated as usual and go to the treasury. Users who have not repaid their assets after lease expiry will be charged a collateral management fee of 3% of the total asset value of their collateral each day and will be paid into the treasury. When the collateral value triggers the liquidation threshold, they will enter the liquidation process. When the value of collateral in the pool is less than 1BTC for three days consecutively, the pool will be forced to liquidate, and all proceeds will be paid to the treasury.
Konomi Ocean Lending testnet will be launched next month. We welcome everyone to participate in the testnet and provide us with invaluable feedback.
About Konomi
Konomi is a decentralized money market protocol built using Polkadot’s Substrate. Konomi is working to provide active money markets across the entirety of the Polkadot ecosystem, as well as expand and integrate into cross-chain networks. By introducing a fluid market for cross-chain crypto assets, Konomi hopes to provide an overall better user experience that is accessible regardless of the native network the end user prefers.
Stay in touch with us through:
Website: https://www.konomi.network/
Twitter: https://twitter.com/KonomiNetwork
Telegram: https://t.me/konominetwork
Telegram Announcements: https://t.me/konominetworkchannel
Telegram (Vietnam): https://t.me/konominetwork_vn
