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Tokenomics & Value Accrual

Tokenomics​

LARI Finance does not currently have a token. In the future, the community may decide to release a governance token for census and coordination purposes.

Value Accrual​

As a multi-sided marketplace, multiple actors in the LARI Finance protocol stand to gain value. Real yield is charged to borrowers in the underlying asset they are borrowing. In the event of a liquidation, the affected borrower will be charged a liquidation fee and surcharge.

Borrower Interest​

Pool Managers​

Pool managers can set a managerReserve of up to 10%. Each time a borrower pays interest, the managerReserve percentage will be directed to the pool's Pool Manager Purse.

LARI Finance DAO​

Each pool has a protocolReserve that must be set to a minimum of 5%. Each time a borrower pays interest, a protocolReserve percentage will be directed to the pool's Protocol Reserve Purse.

Depositors​

Depositors will earn interest in proportion to their share of the supplied asset being borrowed. Depending on a pool's managerReserve and protocolReserve settings, the depositor will earn 70-95% of interest paid by borrowers.

Liquidations​

For more detailed information on liquidations, please check here.

Liquidators​

Liquidators have the opportunity to bid on collateral at a discount to the liquidation oracle price. The discount is set on a per asset basis by the Pool Manager.

In the current protocol design, any person is eligible to participate in liquidations. In the future, functionality may be added that would permit Pool Managers to grant liquidation rights exclusively to a list of addresses.