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Why would I use Vibranium for minting (borrowing)?
Vibranium Protocol offers negative-interest loans. The protocol enables you to borrow vUSD/rvUSD using your ETH/stETH/rETH as collateral, earn a steady income, and repay your debt later. This eliminates the need to trade your ETH to access liquid funds while your held vUSD also earns a stable interest rate over time.
What are the Minting Requirements?
- The user's collateral rate should be above the safe collateral rate, which is 150%.
What is collateral?
Collateral is any asset that a borrower must provide to take out a loan, acting as security for the debt. Currently, Vibranium supports ETH, stETH and rETH as collateral.
Vibranium Protocol automatically converts any ETH deposits to stETH and rETH. The protocol treats 1 ETH as 1 stETH, so all references to stETH below are to ETH.
What's the logic behind 0-interest loans?
There are no borrowing (minting) costs or interest charges in the Vibranium Protocol. However, the protocol exchanges the LSD (Liquidity Staking Derivatives) revenue generated by stETH into vUSD and airdrops it proportionally to vUSD holders, allowing users to make more the longer they borrow (mint/hold).
stETH LSD APY is ~5%, of which, 1.5% will be distributed to esVIB holders (which can be revised by the Vibranium Community DAO).
What is the timeline for repayment?
There is no set payback period for loans issued by Vibranium Protocol. As long as you maintain a collateral ratio of at least 150%, you are allowed to keep the loan open and pay off your debt whenever you want.
What is the Collateral Rate?
The collateral rate is the ratio between the dollar value of your collateral in the Vibranium Protocol Vault and your loans in vUSD/rvUSD. The collateral rate fluctuates over time as the price of ETH changes. You can influence the rate by adjusting your collateral and/or debt — i.e., adding more ETH collateral or paying off some of your debt.
Let's say the current price of ETH is $2,000 when you deposit 10 ETH. If you mint (borrow) 10,000 vUSD/rvUSD, then your current collateral rate is 200%.
What is the minimum collateral rate (MCR) and the "recommended" collateral ratio?
The minimum collateral rate (or MCR) is the lowest ratio of loan to collateral that will not trigger a liquidation under normal operations (AKA Normal Mode). This parameter is set to 150% on Vibranium Protocol.
i.e., if you have a loan of 10,000 vUSD/rvUSD, you would need at least $15,000 worth of ETH as collateral to avoid the risk of being liquidated.