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Liquidity Pool
marginfi's liquidity pool is a shared collateral, borrow-lend pool between all margin accounts. Any margin account can access liquidity in the pool according to their available margin.

Mechanics

Lending and borrowing happen implicitly in marginfi. This allows for a better trading experience and more efficient usage of liquidity.
Any given margin account either acts as a lender or a borrower in the pool. Whenever a margin account has positive balance, that is available in the pool to be used by margin accounts that require more collateral than their account balance.

Interest Rates

Lenders are incentivized to provide collateral by earning interest paid by borrowers for their collateral.
Interest rates are compounded hourly.
  • u - utilization ratio
  • c - scaling factor
i=βˆ’ln(1βˆ’u)β‹…ci = -ln(1- u) \cdot c
With the current mainnet-beta configuration (c = 0.2), our interest rate curve looks like this.
marginfi liquidity pool interest rate curve

Solvency

The pool is protected with the liquidation mechanism and the insurance fund to ensure marginfi can honor its obligations.
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Limitations

Borrowed liquidity can't be withdrawn from your margin account.
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Mechanics
Solvency
Limitations