Liquidity¶

Warning

this is as I understood from the documentation which seems to be outdated and only for v1

Users can borrow as many tokens from an iToken as other users have lent to said contract

marketLiquidity(): amount of iToken available for borrowing (totalAssetSupply()-totalAssetBorrow())
totalAssetSupply(): amount of iToken currently being supplied for lending, which includes earned interest (iToken total supply)
totalAssetBorrow(): amount of assets currently borrowed in active loans

How is interest rate determined¶

Lending¶

@startuml
Actor User
Participant Token
Participant iToken

User -> Token: approve(iTokenAddress, depositAmount)
User -> iToken: mint(depositAmount)
iToken -> Token: transferFrom(userAddress, iTokenAddress, depositAmount)
iToken -> iToken: _mint(userAddress, depositAmount)

=== the user decides to redeem the loan ==

User -> iToken: burn(receiver, burnAmount)
User <-- iToken: loanAmountPaid
@enduml

It’s possible for the iToken to not have enough Token balance to redeem the whole loan, that’s why the loanAmountPaid is returned.

In that case, the User could call the claimLoanToken which puts them in a “reserve” queue to be automatically paid back as liquidity becomes freed from borrowers [1]_ . The protocol doesn’t guarantee all loans can be redeemed.

Borrowing¶

short position¶