Depositing altcoin collateral

Borrowers deposit collateral into user-specific and asset-specific Collateral Safes within the Primary Lending Platform. For example, if the user deposits two different projects’ tokens, they will establish two different Collateral Safes.
In return for their altcoins, borrowers receive a non-transferable token, PIT (Primary Index Tokens), which standardizes their collateral assets. Each PIT is pegged to 1 USD. As such, PIT represents the Borrower’s borrowing capacity in USD. The amount of PIT tokens awarded to the Borrower for the assets they deposit is based on the LVR for the asset deposited. PIT value can be calculated using the following formula:
The formula to calculate the PIT balance of a borrower.
The amount of a user’s PIT (i.e. line of credit) will fluctuate with the market price of their collateral assets deposited on the platform.
Different assets can have different LVRs, which depend on the asset's Tier. Collateral types accepted into Primary Collateral Safes are classified as Tiers ranging from Tier 0 to Tier 2. Tiers refer to the varying classes of collateral asset types, reflecting their volatility and liquidity.

Undertaking stablecoin loans

Borrowers can take out stablecoin loans from the Primary Capital Pool based on their borrowing capacity, i.e., the amount of PIT tokens they have available.
Each specific loan is taken out in relation to a particular Collateral Safe. Therefore, a user may have multiple loan positions open at any time, associated one-to-one with multiple Collateral Safes.
If the Borrower has remaining borrowing capacity for a given Collateral Safe (i.e. remaining PIT tokens), the loan amount can be extended by borrowing additional stablecoins or excess collateral can be withdrawn by the Borrower.

Interest charges on open loan positions

Interest is charged on each of the Borrower’s open loan positions. This is calculated per block and is accrued to each loan position. The platform presents both the loan principal amount and the accrued interest amount for each loan.
Accrual of interest increases the amount the Borrower needs to repay to settle the loan. Accrual of interest also reduces the amount of the Borrower’s available PIT tokens, i.e., reduces their remaining borrowing capacity.

Repaying stablecoin loans

Any repayment of stablecoins to settle a loan position is first applied to the accrued interest amount and then applied to the loan principal amount.
Repaying any part of a loan increases the Collateral Safe’s borrowing capacity. i.e. increases the amount of available PIT tokens.