Parameters

Bitcash employs a comprehensive system of overcollateralization and liquidation to maintain financial stability and protect against market fluctuations. Key operational parameters within this system are determined by community-defined rules and mechanisms.

• Overcollateralization Rate: The platform sets a specific overcollateralization rate. For example, with a rate of 50%, users can receive DAIX equivalent to only 50% of the value of their staked wORDI. This safeguards against collateral volatility. This rate is subject to community-defined rules.

Formula:

$$EligibleDAIX=ValueofwORDI×OvercollateralizationRate$$

Example: If you stake wORDI worth 100 USDT at a 50% overcollateralization rate, you can mint

$100×0.50=50100×0.50=50 DAIX$

• Health Factor: The Health Factor is a crucial metric that determines the safety margin of a user's staked assets and is used to assess the risk of liquidation.

Formula:

$HealthFactor=(1−ValueofmintedDAIXValueofwORDIstaked+SafetyMargin)×100$

Safety Margin: A constant percentage providing an additional buffer against market volatility. This margin is subject to community-defined rules.

• Liquidation Trigger Threshold: Liquidation occurs when the Health Factor falls below a predetermined threshold due to a decrease in the value of wORDI. This triggers the process to mitigate risk for the system. This threshold is subject to community-defined rules.

• Swap Fees: Fees are charged for the conversion between wORDI and ORDI via the Bitcash bridge. This fee structure is determined by community-defined rules. A mechanism exists for sharing revenues generated from these swap fees among BTH token holders.