Supply & Borrow
Demeter made significant innovation to optimize the interest rate model, as well as the collateral ratio in the DeFi lending agreement. In particular, Demeter established a new credit rating model (DCRM) to incorporate and grade all existing crypto assets for credit. Based on this model, Demeter introduces a wider variety of crypto asset types such as LP assets, collateralized assets, NFT-fi assets, etc. It enables a high degree of compatibility of lending models between assets while ensuring security and provides maximum convenience for users by controlling interest rates and volume through smart contract.
Borrowing and stablecoin minting on Demeter is established through over-collateralization. Borrowers deposit cryptocurrencies or Synthetic Assets into Demeter, and each asset has a collateral ratio that represents the loan-to-value ratio. Users can obtain a "line of credit" by supplying these assets. If a borrower's available credit limit falls below zero, their collateral will go into liquidation in order to pay off the debt. Each asset has a different interest rate, which is determined by the supply and demand of the asset.