Risk Tiers

mrgnlend has a concept of Asset Risk Tiers. This unique design allows for safe support of a larger array of assets, with a particular focus of supporting long-tail tokens with unpredictable liquidity. mrgnlend has three risk tiers:
  • Collateral Tier: This is the standard asset risk tier, similar to traditional lending protocols. Assets in this tier can be deposited, borrowed, and used as collateral within the protocol’s established limits. This tier is reserved for assets with higher liquidity.
  • Borrow-only Tier: This tier is reserved for assets that have a deposit weight of 0. In other words, they may be borrowed, but cannot be borrowed against.
  • Isolated Tier: This tier accommodates higher-risk assets. If an asset is classified under the Isolated Tier, traders can only borrow this asset (it is not supported as collateral), and when borrowed, no other assets may be borrowed in the trader’s portfolio. When borrowed, these assets are borrowed against assets in the collateral tier.