Asset Risk

Each asset in the Parallel protocol has specific parameters that influences how they can be supplied and borrowed.

• Collateral - Can this asset be used as collateral against which to borrow?

• Collateral Factor (CF) or Loan-to-Value (LTV) - What is the maximum amount that can be borrowed? It is represented as a % with numerator equal to $Max \ Amount \ Borrowed/Value \ of \ Supplied \ Asset$. We will often refer to this value as Collateral Factor and abbreviate as $CF$.

• Liquidation Threshold (LT) - This represents the point when the asset would start to go through the liquidation process. It is represented as a % with numerator equal to $Total \ Debt/Value \ of \ Asset$. The difference between the CF and Liquidation Threshold can be considered as the safety cushion for borrowers.

• Liquidation Bonus - The amount of additional collateral that liquidators receive / are discounted for purchasing assets on liquidation. Represented as percentage of the collateral purchased.

• Supply Cap - The maximum amount in a given token which Parallel will support as deposit. This parameter limits potential concentration risk in a given asset where Parallel controls an outsized proportion of its total circulating supply. We target approximately 1% of total circulating supply of riskier assets.

• Borrow Cap - The maximum amount in a given token which Parallel will allow to be borrowed. If Borrow Cap is below Total Debt in a given token there will be no forced liquidation but no new borrow positions may be opened.

For each wallet the maximum CF is calculated as the weighted average of the CF's of the collateral assets and their value:

$$CF_{Account} = \frac{ \sum^i_{i=1}{Collateral_i \: in \: ETH \: \times \: CF_i}}{Total \: Collateral \: in \: ETH \:}$$

For each wallet the Liquidation Threshold is calculate as the weighted average of the Liquidation Thresholds of the collateral assets and their value:

$$Liquidation \: Threshold= \frac{ \sum^i_{i=1}{Collateral_i \: in \: ETH \: \times \: Liquidation \: Threshold_i}}{Total \: Collateral \: in \:ETH\:}$$

The table below shows a summary of the latest values:

Asset	Symbol	Collateral	Max CF	Liquidation Threshold	Liquidation Bonus	Supply Cap	Borrow Cap
Bored Ape Yacht Club	BAYC	Yes	50%	79%	N/A	1000 BAYC	N/A
Mutant Ape Yacht Club	MAYC	Yes	50%	73%	N/A	2000 MAYC	N/A
Bored Ape Kennel Club	BAKC	Yes	30%	65%	N/A	1000 BAKC
Sewer Pass	SEWER	Yes	0%	N/A	N/A	N/A
CryptoPunks	PUNK	Yes	60%	72%	N/A	100 Punk	N/A
Azuki	AZUKI	Yes	50%	71%	N/A	100 AZUKI	N/A
Doodles	DOODLE	Yes	35%	78%	N/A	100 DOODLE	N/A
Clone X	CLONEX	Yes	35%	65%	N/A	100 CLONEX	N/A
Moonbirds	BIRD	Yes	30%	65%	N/A	100 BIRD	N/A
Meebits	MEEBIT	Yes	30%	65%	N/A	200 MEEBIT
Pudgy Penguins	PUDGY	Yes	50%	65%	N/A	100 PUDGY
Otheredeed	DEED	Yes	35%	65%	N/A	1000 DEED	N/A
Otherdeed Expanded	EDEED	Yes	30%	65%	N/A	1000 EDEED
Vessels	VESSEL	Yes	30%	65%	N/A	1000 VESSEL
Kodas	KODA	Yes	30%	65%	N/A	1000 KODA
DeGods	DEGOD	Yes	30%	65%	N/A	1000 DEGOD
BEANZ	BEANZ	Yes	30%	65%	N/A	1000 BEANZ
Chromie Squiggles	SQUIGGLE	Yes	20%	65%	N/A	1000 SQUIGGLE
USDC	USDC	Yes	80%	85%	5%	None	Supply
USDT	USDT	Yes	75%	80%	5%	None
stETH	stETH	Yes	72%	83%	5%	47,000
wstETH	wstETH	Yes	72%	83%	5%	47,000
DAI	DAI	Yes	75%	80%	5%	None	Supply
BLUR	BLUR	Yes	25%	35%	5%	5,000,000 BLUR
Ether	ETH	Yes	82.5%	85%	5%	None	Supply
Lido Staked ETH	stETH	Yes	73%	75%	5%	None	Supply
ApeCoin	APE	Yes	50%	70%	5%	18,062,500 APE	Supply
cAPE	cAPE	Yes	50%	70%	5%	18,062,500 cAPE