Lending-Borrowing Balancer System (LBBS)
Why Lending-Borrowing Balance System is needed
The Lending-Borrowing Balance System (LBBS) is necessary within BaseBank to address the potential imbalance in cash flow and lending and borrowing activities. Users who utilize the Lending feature on BaseBank receive a fixed interest rate of 1% per day. On the other hand, borrowers have varying interest rates ranging from 0.6% to 1% based on their credit rank.
This discrepancy in interest rates can result in an uneven distribution of funds within the lending ecosystem, leading to an imbalance in cash flow and lending activities. To tackle this issue, BaseBank has implemented the Lending-Borrowing Balance System. The LBBS ensures that there is an equilibrium between the flow of funds from lenders and the demand for borrowing, promoting a sustainable and balanced lending environment.
By actively managing the lending and borrowing activities, the LBBS helps maintain stability and profitability for both lenders and borrowers. It ensures that the cash flow remains healthy and facilitates fair and sustainable lending practices within the BaseBank platform. The LBBS is a crucial mechanism that helps address the potential imbalances arising from differing interest rates and fosters a balanced ecosystem for all participants involved.
Operation of Lending-Borrowing Balance System (LBBS)
The Lending-Borrowing Balancer System (LBBS) is integral to BaseBank's Lending 2.0 ecosystem. Its primary purpose is to maintain a healthy balance between borrowers and lenders, ensuring a sustainable and profitable cash flow for all participants, including borrowers, lenders, and the platform itself. Three available Funds are designed exclusively to support the operation of this system:
To support the operation of the LBBS, BaseBank designates a specific fund called the Platform Development Fund. This fund is funded by transferring swap fees collected on the platform. These fees, generated from the various transactions conducted on BaseBank, are directed towards the Platform Development Fund. Part of this fund is allocated for the smooth functioning of the Lending-Borrowing Balancer System. At the same time, the remaining portion is utilized for the platform's maintenance and development needs.
Furthermore, the LBBS benefits from the Launchpad Fee and Revenue derived from the Launchpad feature on BaseBank. The fees collected from projects launched on the platform and the revenue generated from the Launchpad initiative contribute to the resources allocated to the operation of the LBBS. These funds play a crucial role in ensuring the system's effective functioning.
The LBBS may also utilize a portion (30%) of the xBANK obtained from the Fast Redeem Penalty if needed. This penalty is imposed when users opt for fast redemption of their xBANK tokens. By setting aside a percentage of the penalty, BaseBank ensures that sufficient resources are available to sustain the operation of the LBBS when necessary.
The Lending-Borrowing Balancer System is a vital mechanism that contributes to the stability and profitability of BaseBank's Lending 2.0 ecosystem. Through the Platform Development Fund, Launchpad Fee and Revenue, and a portion of the Fast Redeem Penalty, BaseBank maintains the necessary resources to support the operation of this system, ultimately benefiting all participants involved.
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