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    • General/FAQ
    • Choosing Pools
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  1. Users

Choosing Pools

PreviousGeneral/FAQNextLending-Borrowing

Last updated 8 days ago

Users should be careful when choosing a pool to use — below are some things for the users to pay attention to:

  • Check if the pool supports the asset they want to lend, borrow, or collateralize.

    • Assets supported for lending and borrowing will have a above 0 and show an interest rate above 0.

    • Assets supported as collateral will have a above 0.

  • Ensure the pool has a well-capitalized backstop module.

    • The backstop module is a fund of assets insuring the pool against bad debt. Well-capitalized backstop modules denote a pool being relatively safe, as backstop module depositors will not want to insure unsafe pools.

    • If a large percentage of the backstop module is queued for withdrawal, the pool is probably in an unstable state — and the user should avoid it for the time being.

  • Ensure the assets supported as collateral in the pool are safe collateral assets.

    • Generally, low volatility and high liquidity assets make good collateral.

  • Ensure the pool's are set appropriately.

    • The pool should have reasonable collateral and liability factors for supported assets.

  • Ensure the pool's oracle contract is reliable.

    • Lending pools rely on oracles to fetch asset prices — users should always be sure the oracle for their lending pool is reliable, or their assets may be lost.

  • Ensure the pool admin is trustworthy

    • The pool admin has the ability to change the majority of these settings, so trusting them is a requirement for using the pool.

    • Some pools use disabled public keys as the admin. If this is the case, the pool is immutable and no configuration options can be changed.

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risk parameters
liability factor
collateral factor