🔰Multi-collateral system
Last updated
Last updated
JOJO uses USDC as the settlement currency, but you can also use other assets as collateral. Specifically, this is a credit issuance system similar to DAI, where you can borrow out JUSD by over-collateralizing assets such as ETH. And JUSD is considered to have equal value to USDC within JOJO's perpetual contract trading system.
Although you trade using JUSD, profits and losses are still settled in USDC. This means that if you make money, you can withdraw it in USDC. If you lose money, your JUSD will be locked until you repay the debt with USDC.
JUSD is designed to always be equivalent to 1 USDC within JOJO's trading system, ensuring stability and reliability for users.
When the value of your collateral decreases, you will face liquidation.
Initial ratio: If the value of your collateral multiplied by its corresponding initial ratio is less than the JUSD you have borrowed, you will not be able to borrow more JUSD.
Liquidation ratio: If the value of your collateral multiplied by its corresponding initial ratio is less than the JUSD you have borrowed, you will be liquidated.
| Non-stable tokens | Initial ratio | Liquidation ratio |
|---|---|---|
cbETH | 70.00% | 82.50% |
WETH | 70.00% | 82.50% |
pumpBTC | 70.00% | 82.50% |
earnUSDC | 90.00% | 97.00% |
AERO | 65.00% | 75.00% |
mUSDC | 90.00% | 95.00% |
DEGEN | 50.00% | 70.00% |
wUSDM | 90.00% | 95.00% |
JOJO's initial ratio and liquidation ratio are formulated based on JOJO's predictions on the price fluctuations of non-stable tokens and the platform's ability to pay. The price of non-stable tokens is provided in real-time by Chainlink.
The liquidation occurs on-chain and is open to anyone without the need for permission. The system will sell collateral at a discounted price for USDC.
It's important to note that the liquidation process for the multi-collateral system operates independently of the perpetual futures trading system. Therefore, while your multi-collateral assets may be subject to liquidation, your futures positions will remain unaffected.
Maintaining a secure platform is our top priority and JUSD uses a special floating exchange rate to achieve that. This system adjusts automatically in response to redemption pressure, ensuring the overall stability of JUSD
Definition
USDC debt = The sum of the maximum amount of USDC that all users can withdraw (exclude insurance fund)
USDC inventory = The amount of USDC in the Dealer Contract
USDC redemption pressure = USDC debt / USDC inventory - 1
JUSD interest rate curve simulation
If redemption pressure ≤10%, interest rate = 0%
If 10% < redemption pressure ≤25%, interest rate = redemption pressure
If redemption pressure >25%, interest rate = redemption pressure * 2
The backend is actively triggered and adjusted once a week. If the JUSD interest rate changes by more than 5%, it will be adjusted immediately.
The interest generated by JUSD will be used entirely for the insurance fund.
Regardless of collateral amount, the borrowing limitation is capped at 100,000.00 JUSD for each user. And the platform borrowing limitation is capped at 1,000,000 JUSD
For dedicated market makers who have completed KYC, JOJO also supports the use of funds from centralized exchanges as collateral to mint JUSD on JOJO to help provide liquidity. If you want to become a dedicated market maker, please contact jotaro@jojo.exchange.
