Rodeo Finance


As you ask questions they will be posted here.

Lending FAQ

What is the lending interest rate (APR), does it vary, and how is it calculated?

Rodeo aims for the least surprise, with lending and interest rates following a similar model to commonly used protocols, ie Compound and Aave.
The supply interest rate is calculated using several variables, and changes according to the level of utilization in the lending pool. The supply rate value consists of a base rate, which is then added to a 'low' variable rate that increases or decreases depending on the level of pool utilization. When the level of utilization reaches a pre-defined 'kink' value, a 'high' dynamic rate is used. This jump in dynamic rate is designed to stabilize the system by encouraging greater amounts of funds from lenders when utilization reaches high levels, while dampening borrowing activity from users.

Is the lending pool boot strapped to ensure that lenders are able to withdraw at all times, even with full borrowing usage?

The protocol may or may not bootstrap pools. Regardless, incentives will be put place so that farmers get a good rate and lenders also get good yield and can withdraw. In the future, we might implement some bonding mechanism that will generate ProtocolOwnedLiquidity which, yes, would mean there's always a buffer for withdrawals.

Are there time limits to lending/borrowing positions?

There are no time limits for entering or exiting positions, except for some strategies that depend on external protocols rules and restrictions.

Where does the yield come from (from lending assets)?

Yield for lenders comes from the interest paid by borrowers on the platform. Yield for borrowers that enter positions is generated from fees and protocol revenue that varies depending on the particular strategy used. This includes revenue from Uniswap, Sushiswap, and GMX trading fees.

When and how often is interest paid to the lender/lending pool?

Interest is calculated every second, and is updated and accrued during any lending, withdraw, or borrow action.

Can I be liquidated as a lender

No, only borrowers that use leverage can be liquidated if price moves too far against them

Can I take losses due to bad debt

It's extremely unlikely. Rodeo Finance uses conservative liquidation thresholds to protect lenders, so liquidation will be completed even during extreme price movements.
Additionally Rodeo Finance has numerous additional security layers including Chainlink price feeds for major assets, battle tested oracles for Farm prices, decentralized liquidation bots, flash loan protection, and defines allowable actions for utilizing assets within Rodeo
Rodeo also maintains Lending Pool Reserve Assets to pay back bad debt, should the unlikely situation occur

Farming FAQ

Where does the Yield come from

Yield comes from earning in the Farm you have deposited into based on your assets + leveraged assets. This includes real revenue from strategies such as Uniswap, Sushiswap, and GMX trading fees, etc.

Are there time limits for the Farms

There are no time limits for entering or exiting positions. There may be some strategies that depend on external protocol rules and restrictions (ie hedged positions with epoch based options)

Is my position an ERC20 or NFT?

Farming on Rodeo gives you a tradable NFT representing your position, similar to LPing on UniswapV3. Each position is a unique combination of borrowed asset + strategy + initial collateral amount + amount borrowed + opening time, and thus needs to be represented as an NFT.
When you open a position, Rodeo builds a wrapping NFT which form the basis of liquidity that is used for lending and borrowing. This is similar to how UniswapV3 has their core protocol pools and the periphery NFT position manager, thus enabling users to trade or use their position in other ways.

How is the borrow APR calculated?

The borrow APR is based on a configured "interest rate curve / model" and the current % of utilization of the pool determines where on the curve - ie, what APR - is currently in effect.
The curve is the typical "1. base rate" + "2. a slowly increasing rate" until a certain "kink/point" (of utilization) is reached, then a "3. higher increasing rate" kicks in until 100% utilization to incentivize either more lending or less farming when a pool is over-utilized (so that lenders always have some free tokens to withdraw).

How do you determine loan health?

Loan health is calculated by comparing the users' position value with their total borrow value. If this ratio falls below a value of 1, their position can be liquidated.
Note that the liquidation factor must be taken into account. For USDC it looks like: position value * 0.95 / borrow value (including interest)