Markets and parameters
A market on AMP Finance lends one token. Everything else about it is a short list of settings that shape the offers posted in it.
- One market, one lending token, permanently
- An offer keeps the settings it was posted under; a loan keeps what it was drawn with
- The protocol fee is a share of interest; the late fee is a share of principal
- Terms come with grace windows the lender cannot change
- Minimum offer and borrow sizes, with one exception on the borrow side
How a market is defined
One market, one lending token. The USDC market lends sUSDC; the ADA market lends sADA. Every offer in a market is denominated in that token, every loan is repaid in it, and the token can never change for the life of the market. Within a market, offers differ in their collateral, interest and term; the market sets the bounds those choices are made within.
| Setting | What it controls |
|---|---|
| Lending token | What is lent and repaid |
| Accepted collateral | Which tokens a lender may ask for |
| Terms | The list of durations a lender may choose, each with its grace window |
| Interest range | The lowest and highest interest an offer may set, as a flat rate over the term |
| Protocol fee | The share of interest AMP Finance keeps on repayment |
| Late fee | The share of principal a borrower pays for repaying during the grace window |
| Smallest offer | The minimum size of an offer |
| Smallest borrow | The minimum size of a draw, with one exception |
Each market's page in the interface shows all of these under How this market works, with the market's contract address and the date it went live underneath.
Fixed at posting and at drawing
The settings that matter to a position are copied onto it. An offer takes the market's protocol fee, late fee, term and grace window when it is posted, and every loan drawn from it takes them from the offer. From then on the position carries its own copy, and that copy is what the protocol enforces. Nothing about an existing offer or loan changes afterwards.
Every offer and loan page shows the figures fixed into it. Where they differ from what the market page shows today, the offer or loan page is the one that counts.
Protocol fee and late fee
Two rates are set per market. Both are fixed into an offer when it is posted, and every loan drawn from that offer carries the same rates.
| Protocol fee | Late fee | |
|---|---|---|
| A percentage of | The interest | The principal |
| Paid by | The lender, out of interest, on repayment | The borrower, on top of principal and interest, only when repaying during the grace window |
| Goes to | AMP Finance | The lender, entirely |
| On a default | Nothing. No interest, so no fee | Nothing |
| Rounding | In the protocol's favour by at most the smallest fraction of the token, so the fee collected is never less than the stated rate | In the borrower's favour |
| Fixed when | The offer is posted | The offer is posted |
Example. A loan of 500 sUSDC at 10% interest has 50 sUSDC of interest. With a 10% protocol fee, the lender receives 45 of that interest and the protocol keeps 5. The borrower repays 550 either way. Under a 2% late fee the same loan owes 10 sUSDC extra if repaid during the grace window: 560 in total, of which the lender collects 555 and the protocol 5.
The figures appear in four places: the market page (the current rates), the lend form's review step (What you earn, with the protocol fee already taken out, and what a late borrower would add), the borrow dialog (Due on time and Repaid during grace), and each offer and loan page (the rates fixed into it).
Terms and grace windows
A lender chooses a term from a short list each market provides. Each term comes with a grace window, fixed per market, that a lender cannot change. The market page lists every term with its grace window under Terms a lender can offer, and longer terms carry longer grace windows.
What the grace window is for
The grace window is the period after the due date during which a borrower can still repay, with the late fee, and the lender still cannot seize. Its one purpose is to keep those two rights from overlapping. Without it, a late repayment and a seizure would become possible at the same instant, and a lender who wanted the collateral more than the repayment could try to beat the borrower to it. With it, the borrower has a window that is theirs alone, and the lender's right begins only once it has closed.
It is not a cushion for lateness. The late fee applies from the first second after the due date, grace or no grace. The window changes when seizure becomes possible, not when lateness begins.
Why lenders do not set it
A grace window chosen by each lender would tend towards zero, because an offer with no grace looks better on every other number. Making it a fixed property of the term means a dangerously short window cannot be posted at all. The lengths are chosen to be long enough that a borrower who steps away from their desk near the deadline is not caught out, and short enough not to add materially to the loan.
A position keeps its own term
Every offer and loan page shows its own term and grace window. Those figures belong to the position and are what the protocol enforces, whatever that market's list shows today. The interface always shows the list sorted by length.
Minimum sizes
Each market sets a floor on how small an offer can be and how small a single draw can be. They keep the board free of offers too small to be useful and loans too small to be worth settling.
Smallest offer. A new offer must be at least that market's minimum. The lend form refuses anything smaller before a transaction is built.
Smallest borrow. A draw from an offer must be at least that market's minimum, unless it takes everything the offer has left. That exception exists so that an offer can always be finished: if 1,000 was on offer and 990 has been drawn, the remaining 10 can be taken even though 10 is below the floor. Without the exception, that last 10 would be stuck until the lender cancelled. The borrow dialog says which case applies:
The smallest borrow here is 50 sUSDC, unless you take everything that is left.
Amounts are plain amounts. The interface asks for an amount of the token, and that is all. Where the protocol needs an amount to line up with an offer's internal arithmetic, the form adjusts the typed figure to the nearest amount that works and shows the result. There is nothing for a lender or borrower to calculate.
Each market's minimums are on its own page, under Minimums.