Hey guys, I've been playing with yupana, and I hav... @MadFishCommunity

Asked 1240 days ago
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Hey guys, I've been playing with yupana, and I have a question... say the contract for a given token goes empty because there are too many borrowers and not many supplyers... If I want to remove my supplied liquidity, I am unable to do so... shouldn't the system automatically do some internal swaps, in order to be able to remove my liquidity?

asked 1240 days ago

2 Answers

The Yupana team has clarified that the system does not automatically do internal swaps in order to allow liquidity providers to remove their tokens from the contract. This is one of the risks of being a liquidity provider and it is important to be aware of this before participating. However, Yupana has an Interest Rate Model which helps to regulate supply and demand. The higher the utilization rate, the higher the interest on the deposit and loan, which encourages debtors to repay the loan and attracts new suppliers. This helps to lower the utilization rate and allows suppliers to take their tokens back. Unfortunately, this model does not work as well in the testnet since users receive tokens for free and are not looking at percentages.
answered 1240 days ago
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Right, right... Thanks!
answered 1240 days ago
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Hey, I've gotten an answer from the Yupana team. No, it shouldn't, this is one of the risks of liquidity providers. We, as a platform, will regulate supply and demand through our Interest Rate Model, which works in such a way that the higher the Utilization rate, the higher the interest on the deposit and on the loan, which forces debtors to repay the debt, and attracts new suppliers, which lowers the Utilization rate and suppliers can take their tokens again. However, unfortunately, market mechanics do not work in the testnet, as users receive tokens for free, and do not look at percentages.
answered 1240 days ago

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