With several articles introducing Parasset, we will look at some concrete examples of using Parasset.
Alice wants to quote USDT/ETH/NEST for the dual-track pricing. She can pledge NEST to generate parallel assets PUSD and PETH to participate in quotation mining.
User:
- Alice has 8 million NEST, 0ETH and 0USDT
- 1NEST=0.05USDT
- 1ETH=1500USDT
- The NEST she holds is worth 400,000USDT
Parameters:
- Liquidation line = 80%
- Initial mortgage rate = 60%
- The actual Liquidation line for ETH and NEST are 84% and 75%
Collaterals:
- 3 million NEST to generate 60PETH
- 1.5 million NEST to generate 45,000PUSD
Let’s assume three different situations and see how Parasset works.
A. NEST price rises relative to ETH and USDT. For example 1NEST=0.1USDT, 1ETH=2000USDT and 1NEST=0.00005ETH.
Assuming during this period:
- Accumulated stability fees (which can be treated as “interest”) are 1PETH and 500PUSD. Then the debts are 61PETH and 45,500PUSD.
The collateral ratios of the parallel asset:
- PETH = 61/(0.00005*3000000)=40.6% (more secure)
- PUSD = 45500/(0.1 *1500000) = 30.3% (more secure)
The value of collaterals relative to parallel assets/underlying assets appreciates so it is safer.
B. NEST price falls relative to ETH and USDT. For example 1NEST=0.045USDT, 1ETH=1500USDT and 1NEST=0.00003ETH.
Assuming during this period:
- Accumulated stability fees are 2PETH and 2000PUSD. Then the debts are 62PETH and 47,000PUSD.
The collateral ratio of the parallel asset:
- PETH = 62/(0.00003*3000000) = 68.9% (more dangerous)
- PUSD = 47000/(0.045*1500000)=69.6% (more dangerous)
More NEST needs to be collateralized to make the debt position safe. For example, another 1 million NEST is collateralized.
The collateral ratio of the parallel asset:
- PETH = 62/(0.00003*(3000000+1000000))=51.7% (more secure)
In addition to collateralizing more NEST, she can also:
- Exchange 1 million NEST into 30 ETH
- Use the insurance fund pool to swap 30 ETH into 30PETH
- Repay it to the debt position
The collateral ratio of the parallel asset:
- PETH = (62–30)/(0.00003*3000000)=35.6% (more secure)
- The situation is similar for PUSD.
*The situation is similar for PUSD.
C. In case B, Alice does not add more NEST nor repay PETH but lets the price of NEST fall to 1NEST=0.04USDT and 1ETH=1500USDT.
The stability fee accumulates to 4PETH.
The collateral ratio of the parallel asset:
- PETH = (60+4)/((0.04/1500)*3000000) = 80% (liquidation is triggered)
Anyone can initiate a liquidation:
- The liquidator took 3 million NESTs and used 2.7 million NESTs to exchange them for 72 ETH.
- Put 72 ETH into the insurance fund pool to generate 72 PETH.
- The 64PETH is used to repay the debt.
- The remaining 8PETH stays in the insurance fund pool as the income of the Insurance Fund Pool LPs.
The above are some examples to inspire users what Parasset can do in real situations. We are excited to see more ideas and adoptions in the future.
Website：https://www.parasset.top/#/home
Twitter：https://twitter.com/Parasset2021
Telegram：https://t.me/parasset_chat
GitHub：https://github.com/Parasset
*For the calculation convenience, the price used in this article is from February 2021.
