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 / collateral * 100%
E.g. If the borrower wants to borrow 50,000 USDT and the loan-on-value rate is 50%, the borrower needs to mortgage digital asset equivalent to 100,000 USDT.
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 collateral / 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?
Small loan no need audit and funds will be instantly distributed to users' account after the order is generated. Large 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 and the system will deduct the interest accrued in the previous day every day. Users can borrow and repay at any time before the deadline of repayment. When the daily automatic interest deduction, if your Contract account assets are not enough to pay the interest due, the system will automatically deduct the equivalent collateral for interest repayment, which may cause the order to be liquidated, please pay attention to control the risk.
6.How to deal with the borrower’s overdue repayment?
If the principal and the remaining interest due 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 liquidation.
7.What is order risk rate?
Order risk rate = Collateral / (borrowed assets + interest) * 100%
When users generate Mortgage orders, the value of collateral 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 liquidation risk is. For loan order, users can increase the collateral to control the order risk rate to prevent liquidation.
8.Can users add collateral?
Yes. When the price of the collateral and borrowed tokens fluctuate with the market, the too lower risk rate will trigger liquidation. Users can increase the collateral to increase the risk rate and prevent the order from liquidation.
For two hours before the deadline for repayment, no collateral 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 (namely 08:00 (UTC+8) of the repayment deadline). To avoid liquidation, please repay as soon as possible
- 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 BKEX push and email. After receiving the email, the borrower can add collateral or repay beforehand to prevent the order from liquidation (the risk rate of warning for different mortgage loan plans is different ). To ensure that you can receive early warning information, please bind email address to your account and enable the application notification
Special note: The platform is not responsible for the delay of notification due to the reasons of third-party notification, and users need to pay attention to the risk of orders at any time
10.What is forced liquidation mechanism?
The order risk rate is lower than the liquidation risk rate or overdue repayment will trigger liquidation. BKEX will deduct corresponding collateral which is equivalent to the value of loan principal and accrued interest to repay the debt.