Market

Isolated Market

Affluent utilizes an isolated market model, where each liquidity pool operates independently without interacting with others. This design safeguards users in other markets from exposure to unforeseen risks while allowing new liquidity pools to be rapidly and securely deployed for any token.

Supply & Borrow

Participants may supply liquidity to earn interest or post collateral to borrow assets. Borrowing limits and eligible assets are determined by the collateral mix the user provides.

Action	Description
supply	Deposit assets into an Affluent Market.
withdraw	Redeem supplied assets.
borrow	Borrow against posted collateral.
repay	Repay borrowed assets.
liquidate	Seize collateral of under‑collateralized accounts.

Market Freeze

Market Freeze temporarily suspends risk-increasing transactions, such as borrowing or collateral withdrawal, during periods of unreliable market pricing. It is primarily triggered to protect lender capital, especially in RWA markets where fair value may be compromised or illiquid.

Parameters

Asset‑Specific

Parameter	Purpose
Risk Factor	Quantifies potential loss given market volatility and liquidity
Liquidation Bonus	Premium awarded to liquidators
Interest Rate	Curve governing borrow/supply rates (see Interest Rate Model)
Underlying Asset	Identifies the base asset for LSTs, LP tokens, etc.

Market-Specific

Parameter	Purpose
Borrow Asset	Assets that can be borrowed from the market
Supply Asset	Assets accepted as collateral
Max Risk Ratio	Upper bound of account risk before new positions are blocked
Max Leverage	Leverage ceiling for opening or adjusting positions
Liquidation Risk Ratio	Risk ratio that triggers liquidation
Liquidation Leverage	Leverage level that triggers liquidation

Account Risk Metrics

$$Risk Ratio = \frac{\sum_{i}{f_i\cdot abs(S_i -B_i)}}{S -B}$$

$$Leverage = \frac{S}{S -B}$$

Where:

• $f_i$ : Risk Factor of asset i

• $S_i$ : USD value of asset i supplied ( S : Total Supplied)

• $B_i$ : USD value of asset i borrowed ( B : Total Borrowed)

  • DeFi positions (e.g., Liquid-staking token, LP tokens) are decomposed into underlying assets for risk calculations