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
Last modified 9mo ago