ForTube is a “lending protocol” based on a liquidity pool, which enables anyone to provide digital assets to earn interest or borrow with collateral. Since the launch of ForTube 2.0, it has attracted the participation of many digital asset enthusiasts all over the world. In just one week, the market size has exceeded $100 million. In response to the issues proposed by the community, this article will analyze ForTube 2.0 in detail.
Understanding ForTube
Deposit: Through the “Deposit” function on the ForTube Bank, users transfer digital assets supported by the platform to a “Smart Contract” to host the assets in order to obtain interest. When a user performs the “Deposit” function, the deposited assets will first repay any loans of that asset, and net assets can receive deposit interest.
Example: User borrowed 2,000 FOR on ForTube. If he deposits 10,000 FOR, 2,000 FOR will be used to repay the loan, and 8,000 FOR will be included in the net assets that can earn deposit interest.
Withdraw: User’s “allowable amount” of a certain token includes the “deposited amount” of this token and the “borrowable amount” guaranteed by other deposited assets. If liabilities are generated after withdrawal, interest on borrowing tokens will be generated. For the detailed algorithm, please refer to the following content “How to calculate the allowable amount”
Maximum Loan-to-Value Ratio (LTV): refers to the “Value Ratio” of borrowings and deposits, which represents the maximum borrowing capacity of a specific mortgage.
Example: If a user deposits 10,000 USD equivalent ETH, and the maximum LTV of ETH is 90%, then the user can borrow up to 9,000 USD (10000X0.9) in other currencies with ETH as a pledged asset.
Maximum Security Borrowable Amount: Assuming that the value of user i’s asset deposit is Vi, then Vi = i’s quantity × i’s price. Assuming that the maximum loan-to-value ratio of the asset is Fi, the user’s maximum borrowing capacity is ∑(Vi×Fi). If the user lends according to the maximum borrowing capacity, he will face liquidation risks. Therefore, we multiply the user’s maximum remaining borrowable by a coefficient MAX less than 1 (currently is 0.8), that is, the maximum security borrowable amount = ∑(Vi×Fi ) × MAX.
For example: If a user deposits 10,000 USD equivalent ETH, and the maximum loan-to-value ratio of ETH is 0.9, and at the same time deposits 10,000 USD equivalent BNB, and the maximum loan-to-value ratio of BNB is 0.2, then the user’s maximum borrowing capacity is 10,000 x 0 .9 + 10000 x 0.2 = 11,000 USD. However, if the user lends it at a quota of 11,000, it is easy to face liquidation due to currency price fluctuations. Therefore, the concept of “Maximum Security Borrowable Coefficient” is introduced (currently is 0.8), then the user’s maximum security borrowable amount = 11,000 x 0.8 = 8,800 USD. This can effectively set up the buffer zone and reduce the risk of liquidation of user assets.
How to calculate the allowable amount?
The user’s “allowable amount” of a certain token includes the maximum redeemable amount of the deposit of the token, and the maximum security that can be borrowed under the premise that the deposit of the token has been withdrawn.
Then the user can calculate the allowable amount Zi of any asset i as follows:
1. A user deposits a certain asset, and the redeemable amount of the deposited asset is affected by the debt it borrows. Set Debt as the user’s total debt value and i’s asset price as Pi, then,
Xi’ = [ ∑(Vi × Fi) — Debt ] ÷ Fi ÷ Pi
Therefore, the user’s maximum redeemable quantity Xi is
Xi = min { Xi’, i Account’s Balance}
2. On the premise that the i’s asset deposit has been withdrawn, the user’s maximum borrowable amount Yi is
Yi = [ ∑(Vi×Fi) × MAX — Debt] ÷ Pi
3. Ultimately, the user can take
Zi = Xi + Yi
Example: the user’s fund allocation in ForTube is as follows:
So, for this user, Debt is the value of HT, that is, 50 x 5=250 USD. If the user wants to withdraw USDT, it is logically divided into 2 steps.
1) First, it is necessary to calculate the relationship between the value that can be lent and the debt in the case of the pledged USDT.
The value of USDT deposited = 1 x 100 = 100 USD
The value that the pledged USDT can lend = 100 x 0.75 = 75 USD, and the debt is 250 USD. Hence XUSDT0.
2) The relationship between the value that can be lent and the debt when the user pledges all the assets deposited in the account.
The value that can be loaned by pledged USDT and ETH = 100 x 0.75 + 3,500 x 0.9 = 3,225 USD, the maximum security that can be borrowed is 3,225 x 0.8 = 2,580 USD
Therefore YUSDT = (2,580–250)/1 = 2,330
In the end, the user’s “Allowable Amount” = 0 + 2,330 = 2,330 USDT
What is the health index?
Different from general pledge lending, ForTube’s various assets support each other as collateral for lending, so the pledge rate and liquidation line of a single asset are no longer applicable. Therefore, ForTube introduces the concept of health index. The health index is a value used to reflect the health of the user’s debt. The higher the value, the lower the possibility of liquidation and the higher the security status of funds.
The health index H is defined as follows:
H = ∑(Vi×Fi) ÷ Debt
When the user lends according to the maximum borrowing capacity, H=1; if the price fluctuation makes H<1, the user’s assets will be liquidated.
When the user can lend according to the maximum security, H = 1.25.
Therefore,
When H>1.25, it indicates that the user’s debt is relatively safe;
When 1≤H＜1.25, it indicates that the user’s debt is in an early warning state, and the user should increase the pledge or repay part of the debt;
When H<1, the user’s assets are in a state of being liquidated.
For example: the user deposits 10,000 USD equivalent ETH, and the maximum loan-to-value ratio of ETH is 0.9, and at the same time deposits 10,000 USD equivalent BNB, and the maximum loan-to-value ratio of BNB is 0.2, then the user’s maximum borrowing capacity is 10,000 x 0.9 + 10,000 x 0.2 = 11,000 USD.
If the user borrows according to the maximum borrowing capacity at this time, that is, lends $11,000, then H=1. However, because the prices of ETH and BNB will fluctuate, the user’s maximum borrowing capacity may be less than $11,000 (assumed to be reduced to $10,000). At this time, the H value will be less than 1, and the user’s assets will face liquidation.
Therefore, it is recommended that users borrow according to “Maximum Security Borrowable Amount”, and the H value at this time is 1.25.
How to calculate the APY of mining?
In order to incentivize users to provide liquidity, ForTube launched a weighted asset mining activity. Different currencies have different mining reward coefficients. The user’s weighted asset calculation formula is: ∑(Vi×Fi) +∑(Vj×Fj), where Vi is the value of the user’s i asset deposit and Vj is the user’s j asset loan Value, Fi and Fj are the mining reward coefficients of assets i and j.
Assuming the currency A reward coefficient is the daily FOR reward value, and the weighted assets of all currencies in the system are ∑((Vi Deposit +Vi Borrow)Fi), then,
The formula for calculating the number of FOR users obtained by mining every day is: VFOR{∑(ViFi) +∑(VjFj)} ∑((Vi Deposit +Vi Borrow )Fi)
The APY for mining of currency A: VFORFA∑((Vi Deposit +Vi Borrow)Fi)365100%
Example:
The user deposits 10,000 USD equivalent ETH (the deposit reward coefficient is 0.75) and lends USD 3000 equivalent USDT (the borrow token reward coefficient is 2), then the user’s weighted asset value is 10,000 x 0.75 + 3,000 x 2 = 13,000 USD. At this time, the user dynamically obtains rewards based on the proportion of “13,000 USD” in the entire “weighted assets”, and obtains deposit interest (and pays borrowing interest, if any).
Assuming that the weighted assets of all currencies in the system are $1 million, the daily reward of the platform is 400,000 FOR,
Then users can obtain by mining every day = 400,000 x (13,000/1,000,000) = 5,200 FOR
Be sure to follow us on social media for more updates and mining campaigns:
▲Announcement channel: https://t.me/the_force_announcement
▲Medium: https://fortube.medium.com/
▲ForTube website: https://www.for.tube/home
▲Twitter: https://twitter.com/ForTubeFi
▲Github: https://github.com/thefortube
▲Knowledge library of ForTube platform: https://docs.for.tube/