– Liqwid Finance announced the launch of its DJED market and the addition of qDJED as collateral for the ADA market.
– Liqwid Labs has requested that SPOs update their liquidation bots to the latest version available.
– Users on Liquid Finance can participate as lenders or borrowers, with lenders supplying liquidity to the market and earning interest on their deposits, while borrowers can open perpetual loans in an overcollateralized manner.
Liqwid Finance Updates Cardano Ecosystem
Liqwid Finance has launched its DJED market along with qDJED as collateral for the ADA market. Liqwid Labs has asked that SPOs should update their liquidation bots so they can liquidate one single market only. This development is part of ongoing improvements to Cardano’s ecosystem.
How Do Liquidation Bots Work?
Liquidation bots are responsible for continuously monitoring markets and taking action when necessary. When a threshold is reached, such as when a loan’s collateral falls below a certain percentage, then the bot will take action to liquidate it in order to protect other users from losses.
What Does It Mean For Lenders & Borrowers?
On Liquid Finance, users can choose to be either lenders or borrowers. Lenders supply liquidity to the market and earn interest on their deposits, whereas borrowers open perpetual loans in an overcollateralized manner in accordance with applicable interest rate parameters and current market utilization – which attract variable rates of interest accordingly.
Risk Parameters & Maximum Leverage Ratio
When setting up markets in this system, Liqwid Labs takes into consideration several risk parameters such as maximum leverage ratio (maxLTV), liquidation bonus and liquidation threshold etc., all of which help keep users safe from unexpected losses due to volatile markets. The maximum leverage ratio is currently set at 75%.
In conclusion, Liqwid Finance’s updates are part of Cardano’s ongoing efforts towards improving its ecosystem by providing more secure lending and borrowing options for users. With these new tools being implemented on the network, users should have a better experience when utilizing these services within Cardano’s blockchain network going forward.