Borrowing ebUSD

Troves

Troves hold LRTs deposited by users as collateral. Users can borrow ebUSD against the value of collateral they deposit into their Trove. This ensures all that circulating ebUSD is fully backed by collateral - even in periods of LRT price fluctuations.

Troves keep track of the collateral balance and the ebUSD debt balance of loans on Ebisu money. Users manage their Troves by adding or removing collateral and/or debt. A Trove's collateral ratio will change as these balances are adjusted. Troves are closed when debts are fully repaid.

Loan Requirements

• The minimum collateral ratio (MCR) for a loan on testnet is 120%*.

• A minimum debt of 2,000 ebUSD is required for a loan.

• Each Ethereum address can have one active vault against a given collateral type.

• Users can adjust their interest rate any time throughout the lifecycle of the loan. See Peg Stability & Redemptionsand Fees and Interest Ratesto understand the importance of this feauture.

*Protocol parameters on Ebisu Money testnet are NOT representative of parameters for Ebisu Money mainnet.

Collateral Ratio

Collateral ratio (CR) is the ratio between the dollar value of the collateral in your Trove and its debt in ebUSD. The collateral ratio of your Trove will fluctuate over time as the price of LRTs change (due to ETH price fluctuations). You can manage a Trove's collateral ratio by adding/removing more LRT collateral or paying off some of your ebUSD debt.

For example: Let’s say the current price of LRT is $3,000 and you decide to deposit 10 LRT. If you borrow 10,000 ebUSD, then the collateral ratio for your Trove would be 300%.

When the CR dips below the MCR, your loan will be liquidated.

Loan Duration

Loans issued by Ebisu can be repaid at anytime. Loans accrue interest that is added to a Trove's Debt.

Liquidation Reserve

When you open a trove, 200 ebUSD is set aside to compensate gas costs for a liquidator in the event your Trove gets liquidated. The reserve is fully paid back if you are not liquidated and repay your debt. The liquidation reserve is counted as debt and is accounted for in the collateral ratio.