Actors

• Depositors or liquidity providers are ****participants who want to lend money. They do so by depositing a stable coin into a lending pool and in-turn receive debt tokens. The debt tokens appreciate in value as borrowers repay their loans. For more detail on deposits see this page.
• Borrowers are participants who have minted a NFCS token, have a credit score and want to borrow a specific stable coin amount. For more detail on borrowing see this page.
• Lending pools are the pools of capital into which stable coin deposits are made and where loans are issued from. One asset token (e.g. USDC) has a unique lending pool. For more detail on lending pools see this page.
• Liquidator. All liquidations are managed by the RociFi core team with all liquidated collateral returned to lending pools. See more detail here.

Tokens

• NFCS tokens are required for a user to borrow from RociFi’s lending pools and determine the rates at which a user a is allowed to borrow at. They represent a Non-Fungible Credit Score (NFCS) and must be minted by a user to determine their credit score. For more detail on NFCS tokens see this page.
• Debt tokens represent ownership shares of a specific lending pools. When a depositor makes a deposit into a lending pool a corresponding amount of debt tokens are minted and provided to the depositor. Debt tokens are then returned to a lending pool (burnt) to allow a depositor to withdraw their funds. See more detail here.

Pool specific terms

• Pool value. This is the sum of all stablecoin liquidity in the pool. This value changes with specific events. For instance the USDC pool value increases as more USDC deposits are made and when USDC interest repayments are made. Whereas USDC pool value can decreases if under collateralised USDC loans are defaulted on. See more detail here.
• Debt token supply. This is the sum of all debt tokens minted minus the sum of all debt tokens burnt. Minting and burning of debt tokens takes place with deposits and withdrawals, respectively. A single debt token represent the ownership shares of a lending pools. See more detail here.
• Debt token price. Pool value divided by the debt token total supply equals the debt token price. As debt token supply does not change with every event that changes pool value the debt token price can change overtime. For example a USDC deposit increases the USDC pool value and simultaneously mints debt tokens (increasing supply). Thereby maintaining the existing debt token price. Whereases a interest repayment increases the USDC pool value and has no impact on debt token supply. Thus increasing the debt token price. See more detail here.

Loan terms

• Principal is the initial sum of a stablecoin provided by the lending pool to the borrower. For example if User A borrows 100 USDC then the principal amount is 100 USDC.
• Accrued interest is interest accumulated on the principal amount over the tenure of the loan. RociFi applies a simple interest calculation.
• Outstanding balance is the total amount of stablecoin principal and accrued interest owed by the borrower to the protocol. For instance if a loan principal is $100 and has accrued interest of $5 then the outstanding balance is $105. If a repayment of $20 has been made then the outstanding balance would be $85.
• Loan to value (LTV) sets out how much collateral is required for a given loan size. For example a LTV of 125% means a 100 USDC loan would require $80 of WETH as collateral. A 80% LTV means a 80 USDC loan would require $100 of WETH as collateral.
• Loan maturity date is the date when the loan is expected to have been fully repaid.
• Loan duration is the length of time between when a loan is issued and its maturity date.
• Grace period is the period of time after a loan’s maturity date and before it is liquidated.