Qilin Protocol
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Debt market & Debt Redemption
The liquidity debt model allows the liquidity pool to issue debt when the liquidity safety factor is crossed.
Step 1: debt trigger
When the liquidity pool takes a loss of over 50%, closing and adding liquidity will trigger debt issuance.
Users receive partial profit and debt token when closing positions.
LP receives partial LP token and debt token when adding liquidity.
Step 2: Debt redemption
When liquidity pool recovers in profitability, debt token holders can redeem pool token.
Redeem debt on the "My Debt" page
Redeem debt during removing liquidity
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