SECURED FINANCE USER GUIDE
User Guide on Emergency Global Settlement
Ultimate Safety Net for Lenders in Extreme Scenarios
Introduction
Secured Finance prioritizes transparency and fairness towards our users and their assets. To uphold this commitment, we have introduced a distinctive feature known as Emergency Global Settlement, designed to serve as a safety net in extreme situations. This guide will walk you through the process of navigating this feature should it be activated. For a more comprehensive understanding of Emergency Global Settlement, refer to this article: Emergency Global Settlement.
Emergency Global Settlement
Upon the activation of Emergency Global Settlement, users will be redirected from the standard platform interface to a specialized UI, engineered specifically for managing this procedure during this critical period. In only 2 steps, users will be able to claim back their equivalent assets.
The assets eligible for redemption encompass users’ active loans, collateral, unwithdrawn borrowed assets, and limit lend order assets. These assets will be valued based on the snapshot’s prices contributing to the ‘Net Value’ a user can redeem. (A detailed exposition on the allocation of redeemable assets follows.)
Step 1: Redeem
Click on ‘Redeem’.
A prompt materializes, displaying the ‘Net Value’, snapshot prices, and the collateral weightage held with Secured Finance.
Click ‘Confirm Redeem’.
A MetaMask prompt surfaces for transaction confirmation. Upon transaction execution, a ‘Success’ prompt unveils.
Click ‘OK’ to dismiss the prompt.
Step 2: Withdraw
Having successfully redeemed the holdings, proceed to withdraw the equivalent assets.
Click on any ‘Withdraw’ button.
The ‘Withdraw’ prompt appears.
Select the asset to withdraw.
Enter the amount to withdraw, then click ‘Continue’.
A MetaMask prompt emerges for transaction confirmation. Upon transaction completion, a ‘Success’ prompt is displayed.
Click ‘OK’ to dismiss the prompt. Inspect your wallet to confirm the receipt of the assets.
Allocation of Redeemable Assets
Secured Finance mandates over-collateralization from borrowers to ensure a robust safety net. Consequently, during a Global Emergency Settlement, we are equipped to return the assets to lenders, at least in value. The process involves capturing a snapshot of prices and the collateral weightage held with Secured Finance at the moment of settlement.
However, non-collateral assets retained by Secured Finance, under unwithdrawn Borrowed Assets and Limit Order Assets, will be reverted to the user in their original form. On the other hand, all collateral assets held with Secured Finance will be returned based on the ‘Net Value’.
The ‘Net Value’ is calculated using the snapshot collateral weightage. This means that the allocation of redeemable assets is carried out in equivalent value based on the snapshot collateral weightage, ensuring a fair and transparent return of assets to the user.
Conclusion
The Emergency Global Settlement feature is a robust safety mechanism in place to protect your assets on Secured Finance during critical situations. This guide has walked you through the straightforward steps of redeeming and withdrawing your assets should this feature be activated. Familiarize yourself with this procedure to ensure a smooth experience in Secured Finance. Your safety and transparency in transactions remain our paramount concern as we continuously strive to enhance our platform’s security features.
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