[5 REASONS WHY SERIES]: Rikkei Finance as a Safe and Secure Lending Protocol
With the great support and excitement from the community of the “5 Reasons Why” Series, today we are super exhilarated to bring you to the third episode explaining why Rikkei Finance is a wise choice of investment: Rikkei Finance as a Safe and Secure Lending Protocol.
It’s true that lately there’s many attacks in various sizes targeting different DeFi protocols on BSC. They exploit different weaknesses of the protocols, normally including (1) Bugs in source code (2) manipulating token price and (3) bad risk management control model. Rikkei Finance applies multiple methods to ensure the security of the system, including: applying an improved Multi-kinked interest rate model, employing a 5-phase asset selection process, which will eliminate the risk of price corrections and market manipulation, allowing RIFI system to sustainably respond to any market situations.
Instead of applying the traditional simple linear interest rate model, RiFi uses the Multi-kinked model. The strength of the multi-kinked model is that it can handle the stress point of high utilization rate (Ut). At that point, borrowing demand is significantly high and all users borrow at the maximum. As a result, if the market witnesses a significant price correction, it will create a mass liquidation effect, directly reducing the liquidity of the protocol and making the system unsustainable. RiFi’s approach is to increase the borrow interest rate considerably to reduce risk and limit borrowing at this time.
With a transparent 5-phase asset selection process, assets will be evaluated using a self-developed Liquidity Ranking System, ensuring that only the most liquid assets are allocated to the pool, minimizing the risk of market manipulation and thereby ensuring system sustainability.
The risk management model helps ensure our system sustainability by controlling the collateral factor closely, setting limits for one-time withdrawal; freezing the supply/borrow when there is an attack; and employing complex price oracles. This allows our system to sustainably respond to any market situations.
With those effective methods, Rikkei Finance is confident that we will be able to accomplish our missions and goals to be a revolutionary lending protocol with secure and sustainable development.
About Rikkei Finance
Rikkei Finance is a Metaverse DeFi Protocol, enabling a Safe and Secure Open Lending with core features: Cross-chain support, NFTs lending, and Liquidation coverage. It utilizes blockchain tech that enables cross-chain integration, meaning it can accept digital assets that operate on any blockchain network and render it at an equivalent rate, making them a real-time currency exchange network.
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