1. What is Pibase Flexible Loan?
Pibase Flexible Loan, ie. Pibase Loans (Flexible rate), is an isolated, overcollateralized, open-term loan product.
Users are able to take up isolated loan positions made up of one collateral-loan pair each, such as, [Pi collateral + USDT loan] in one position, and [PIB collateral + VNDC loan] in another. Each collateral-loan pair position has distinct Loan-to-Value (LTV) ratios as well as margin call and liquidation LTV levels.
Each loan position must be overcollateralized, meaning the value of collateral pledged by you is more than the value of the digital assets we advance to you.
Since Pibase Flexible Loans are open-term, you can keep your positions open indefinitely as long as this product supports the loaned and collateral digital assets, and the relevant LTVs are not exceeded.
2. How do I start borrowing on Pibase Flexible Loan?
You may apply through the collateral-loan pair ordering process, and decide which cryptocurrencies you’d like to pledge and borrow and the Loan-to-Value ratio for the loan order you prefer. You can specify the respective amounts for the borrowed token and collateral token.
3. What is LTV, and how much can I borrow from Pibase Flexible Loan?
Depending on which cryptocurrency you wish to pledge, a different initial LTV may apply. LTV stands for Loan-to-Value. It represents the ratio between the value of the digital assets loaned to you plus accrued interest, if any, relative to the value of your collateral. These values are based on each cryptocurrency’s Price Index.
LTV = Loan Value / Collateral Value
For example, assuming an initial LTV of 65% for USDT: if you have pledged 1,000 USDT, you may borrow up to 650 USDT worth of loanable assets.
4. What is loan liquidation, and what is the liquidation LTV?
In a secured loan, the lender (Pibase) has the right to obtain ownership of the collateral if the borrower (user) defaults in their obligation. For example, when the current LTV exceeds the liquidation LTV. This might happen when the collateral decreases in value or the value of the borrowed assets increases due to accrued interest over time.
Important: If the market is volatile and the value of the collateral becomes less than the total debt and interest value at the time of liquidation, you are obliged to immediately repay the remaining arrears.
5. What happens when a loan is liquidated?
A full liquidation occurs once a hard-cap liquidation LTV of 90% is reached for any cryptocurrency. The entire loan will be repaid using the equivalent value of collateral for that loan position.
If liquidation happens, you will not be able to adjust LTV nor repay the corresponding Loan order. The rest of your assets will remain in your Spot Account.
6. What is a margin call?
A margin call is issued when a particular collateral-loan pair position reaches its margin call LTV, which is 85% at the moment. This margin call LTV represents a warning that the loan position is getting close to the liquidation LTV. You can take action by pledging more assets to increase the collateral value or to partially reduce the outstanding loan, thus reducing the LTV.
For example, in a PI/USDT collateral-loan pair with a margin call LTV of 70%, the system will remind you to top up the Collateral Asset when the Outstanding Loan + Accumulated Interest/ Collateral Asset ≥ 70%.
7. Will I be notified in the event of margin calls or liquidations?
You’ll be notified via in-app, email in the event of a margin call or liquidation. The notifications serve as a risk warning and cannot guarantee timely delivery.
By using the service, you agree that under certain circumstances, you may be unable to receive or get delayed email reminders. The circumstances include but are not limited to personal network congestion, poor network environment, local restrictions, service provider’s policies, and device malfunctions.
Please note that if the margin call time and liquidation call time are too close, the margin call notification will be automatically canceled by the system, and you’ll only receive the liquidation call notification. Pibase reserves the right with no obligation to deliver notifications.
8. What Interest Rate applies to my loan?
Pibase publishes all relevant interest rates, and the borrowing rates for each cryptocurrency in Pibase Flexible Loan are updated every hour.
Changes to the interest rate may occur frequently and at any time. It’s important that you carefully monitor the applicable interest rate. You can choose to repay your loan at any time.
Please refer to the Loan Data page for more information.
9. How is interest accrued for my loan positions?
Upon a successful loan order, interest is accrued every hour based on the total outstanding loan and the prevailing APR/ MPR for each hour. The interest accrued after each passing minute adds on to the total outstanding loan.
10. How do I perform loan repayments or adjust my loan LTV?
In the [My Loans] tab, click [Pay] or [View detail] to perform loan repayments or Deposit/ withdraw to increase/reduce collateral respectively.
11. What can I do with the cryptocurrencies borrowed from Pibase Flexible Loan?
You may use the loan for any purpose, including trading on the spot market, depositing into Pibase Staking products, or even withdrawing them from Pibase.
This document may have been translated and published in different languages. In the event of any inconsistency, misstatements, omissions, or errors appearing in any translated version, the English version shall prevail.
