5️W3Bank

W3BANK is a decentralized lending protocol built on the PEGO Network where users can deposit, withdraw, borrow, and repay.

Lending Contract

Users can perform the following operations through the lending pool:

2.1. Deposit

Users transfer encrypted assets from a private address to the smart contract's fund pool through W3BANK's "Deposit" function to earn interest income. When the user performs a "Deposit" operation, the deposited assets will first repay the loan of "that asset" (if any), and the net asset amount can receive deposit interest. At the same time, the system calculates the deposit interest for the user based on the real-time deposit interest rate. It issues the deposit interest in the platform's native token W3K.

2.2. Withdrawal

The user's withdrawal operation is the opposite of the deposit operation, where the user transfers encrypted assets from the smart contract's fund pool to a private address. The "Withdrawable Amount" of a certain token includes the "Deposited Amount" of the token and the "Borrowable Amount" secured by other deposit assets as collateral. If there is a debt after withdrawal, it will accrue loan interest.

2.3. Borrowing

Users can borrow encrypted assets they do not have but urgently need by collateralizing specific assets to the W3BANK lending protocol. In the initial phase of the protocol, mainstream and highly liquid encrypted assets (such as USDT, etc.) are configured by the official as collateral. As the user base grows, the types of collateral will gradually be adjusted through community voting and governance.

Each collateral asset has two parameters: the maximum collateralization rate and the liquidation threshold.

The maximum collateralization rate represents the maximum ratio at which the collateral asset's value can borrow encrypted assets. For example, if the maximum collateralization rate of an encrypted asset is 75%, a deposit of 100 can borrow up to 75 based on this asset as collateral.

The liquidation threshold represents the ratio at which the collateral asset faces liquidation.

Liquidation Threshold > Maximum Collateralization Rate.

2.4. Repayment

The repayment process is the opposite of the lending process, where the user repays the principal and interest to the W3BANK lending pool contract and reduces the corresponding debt in the W3BANK lending system. Users can repay all or part of the debt at any time based on their situation.

2.5. Liquidation

After triggering the liquidation mechanism, the protocol will sell part of the borrower's collateral assets at a certain discount through a contract order, allowing any user to repay the debt on behalf of the borrower and immediately resell it for arbitrage. In the future, the W3BANK liquidation mechanism will also introduce the Dutch auction method, starting from the base price and publicly auctioning the collateral assets gradually increasingly.

Although liquidation may harm the borrower's interests, it protects their assets. When liquidation is triggered, the system's forced disposal of part of the collateral assets can restore the account's overall health index to a normal level, thereby preventing the collateral assets from being liquidated entirely.