1. What is loan-on-value rate?
Loan-on-value rate refers to the ratio of the loan principal and the mortgaged cryptocurrency market value assets. The loan-on-value rate is reasonably determined and fluctuated according to the price fluctuation range, trend and other factors of the cryptocurrency. Therefore, the loan-on-value rate corresponding to different loan currencies may be different. The index price of the corresponding currency is used to calculate the asset, which is calculated according to the unified unit of USDT.
Loan-on-value rate = Borrowed assets / pledged assets * 100%
E.g. If the borrower wants to borrow 50,000 USDT and the loan-on-value rate is 50%, the borrower needs to pledge digital asset equivalent to 100,000 USDT.
2. Index price
Index price is calculated according to the latest price of multiple exchanges. The index price will affect the maximum loan amount and the order risk rate during the loan.
3. How to calculate the maximum loan amount?
Maximum loan amount = available balance * loan-on-value rate * index price; index price = index price of pledge / index price of borrowed tokens
E.g. Mortgage BTC to borrow USDT, the index price of BTC/USDT is 1,000, the available BTC balance is 1.50 BTC, and the loan-on-value rate is 50%
Maximum loan amount of USDT = 1.5 * 1,000 * 50% = 750 USDT
4. How long will it take to get the loan after the borrower mortgages the cryptocurrency to the platform?
BKEX mortgage loan need be audited. The loan will be distributed instantly after the approval. It will begin to bear interest after the approval. The average audit time is 15 minutes.
5. How to calculate the interest?
BKEX platform supports hour interest and daily interest. It is determined by the specific mortgage loan plan and the interest bearing way chose by users when submitting mortgage application. Interest is calculated according to the actual loan time (hour(s)/day(s));
1) Daily interest: Interest shall be calculated from the day when the loan arrives at the account. And then the interest shall be calculated at 00:00 (UTC+8) of every day. If the loan is less than one day, it shall be calculated as one day.
2) Hour interest: The interest shall be calculated when the loan arrives at the account. And then the interest shall be calculated at the beginning of every hour. If the loan is less than one hour, it shall be calculated as one hour.
3) Token type of interest: The token type of interest will be the type of borrowed tokens. Users can borrow and repay at any time before the deadline of repayment. Users must make one-time repayment of the principal and accrued interest of the loan.
6. How to deal with the borrower’s overdue repayment?
If the principal and interest is not repaid at 00:00 (UTC+8) of the deadline of repayment, it will be deemed as overdue. If it is overdue, it will trigger forced liquidation.
7. What is order risk rate?
Order risk rate = Pledged assets / (borrowed assets + interest) * 100%
When users generate mortgage loan orders, the value of mortgage and loan will change with the fluctuation of market price. In order to control the platform risk, the order risk rate is used to measure the value change. The higher the order risk rate is, the smaller the order forced liquidation risk is. For loan order, users can increase the pledge to control the order risk rate to prevent forced liquidation. For two hours before the deadline for repayment, no pledge can be added to the order.
8. Can users add pledge?
Yes. When the price of the pledge and borrowed tokens fluctuate with the market, the too lower risk rate will trigger forced liquidation. Users can increase the pledge to increase the risk rate and prevent the order from forced liquidation.
For two hours before the deadline for repayment, no pledge can be added to the order.
9. What is forced liquidation warning mechanism?
- Warning of forced liquidation due to overdue repayment: The user will be reminded that the payment will be overdue soon and repayment should be made as soon as possible when there are 16 hours to repay
- Warning of forced liquidation due to low order risk rate
In the above two cases, the platform will notify the borrower in the form of SMS. After receiving the SMS, the borrower can add pledge or repay beforehand to prevent the order from forced liquidation (the risk rate of warning for different mortgage loan plans is different ).
10. What is forced liquidation mechanism?
BKEX will deduct corresponding pledge which is equivalent to the value of loan principal and accrued interest to repay the debt (if all the pledged assets are deducted and still cannot repay the debt, BKEX platform will not use any other assets of user’s accounts). If there is any remaining pledged assets, the remaining assets will be returned the user’s wallet account.