Nebula
  • 👉Nebula Testnet
    • Join Nebula Protocol Testnet
    • Testing Nebula Protocol
      • Supply
      • Withdraw
      • Borrowing
      • Repay
  • 👉Nebula Overview
    • Nebula Intro
      • What is Nebula ?
      • The problem
    • Competitive Advantages
      • Innovative Collateralization with DEX LP Tokens
      • Cross-Chain
      • Yield Tranching Mechanism
      • Lending Pools
      • Consensus and Oracle
      • Smart Contract
      • Decentralized Governance
      • Community-Driven Governance
    • Comparison with Competitors (Expanded)
  • ⭐Product Feature
    • User Roles
      • Suppliers
      • Borrowers
      • Governance Participants
      • Developers
    • Protocol Architecture
      • Core Components
      • EVM Compatibility with Enhanced Security
      • Cross-Chain Interoperability via Nibiru’s IBC
      • Advanced Oracle Integration
      • Security and Scalability
        • Security
    • Nebula Product
      • DEX LP Tokens as Collateral
      • Customizable Pool Creation
      • Enhanced Liquidity
      • Cross-Chain CDP Contracts
      • Yield Tranching
    • Use Cases
  • ⭐Tech Overview
    • Nebula Technology Overview
      • Validator-Based Oracle System
      • Consensus and Voting Mechanism
      • Risk Management and Security
        • Collateralization Requirements
        • Liquidation Mechanisms
        • Insurance Fund
        • Decentralized Oracles
        • Interest Rate Risk
        • Smart Contract Security
        • Market Risk
        • Governance Risk
        • Cross-Chain Risks
      • Rewards and Slashing Mechanism
      • Scalable and Resilient Design
      • Interest Rate Model
        • Types of Interest Rates
        • Interest Rate Adjustments
        • Benefits of the Model
        • Example Scenarios
        • Governance Control
        • Competitive Advantage
      • Governance
        • Governance Framework
        • Governance Token Utility
        • Governance Process
        • Key Governance Parameters
        • Governance Security
        • Governance Use Cases
        • Long-Term Decentralization
  • Token
    • Tokenomics
      • Token Utility
      • Revenue Model
      • Supply Dynamics
      • Incentive Alignment
    • Nebula Token Info
      • Token Utility
      • Token Distribution
  • GTM
    • Roadmap
    • Points System
    • Ambassador Program(TBD)
  • Appendix
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On this page
  1. Tech Overview
  2. Nebula Technology Overview
  3. Risk Management and Security

Collateralization Requirements

Over-Collateralization

Borrowers must lock collateral worth more than the borrowed amount to protect the protocol against default.

  • Example: If the collateralization ratio is 150%, a user borrowing $100 must lock $150 worth of collateral.

Dynamic Collateralization

The required ratio varies depending on the asset's volatility:

  • Stablecoins may have lower collateralization ratios due to reduced volatility.

  • Volatile Assets require higher collateralization ratios to mitigate risk.

Borrower Evaluation

The protocol assesses borrowers using:

  • Historical data

  • Credit scoring

  • Behavior analysis

This ensures appropriate lending terms and collateral requirements.

Risk-Based Parameters

Lending parameters, such as loan-to-value (LTV) ratios and interest rates, are customized based on individual borrower risk profiles. This promotes responsible borrowing and reduces default risks.


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Last updated 5 months ago

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