Protocol Methodology

Basic provides DeFi banking (lending and borrowing) services and is a revision of Compound.

Introduction

Basic is a lending and borrowing project based on smart contracts on IoTeX.

With IoTeX being DePIN-centric we noticed DeFi was underrepresented on IoTeX and believe that robust DeFi is necessary for DePIN to flourish as the space matures.

Business Model

Basic Features

• Liquidity pool

• Interest rates are determined algorithmically by supply and demand

• Floating interest rates that are non-negotiable

• Absolutely transparent token balance information, complete records of all transactions and historical interest rates

Deposit

• Aggregate the tokens of each user

• Withdraw the assets at any time

• Collect the accrued interest at any time

Primary Use Cases

• Uses can supply their asset and earn interest at low risk

• dApps, institutions and exchanges can gain incremental returns

Borrowing Tokens

• Requires over-collateralisation

• No time limit for borrowing

Risk

• When the value of the borrowing assets is above the collateral ratio, the users' collateral should be liquidated at a price that is below the market price, which motivates the arbitrageurs to step in to eliminate the risk.

Primary User Cases

• Quickly borrow utility tokens at any time without having to wait (time required to fill an token buy order on exchanges)

• Users can conduct ICO investments by borrowing using their existing portfolio (multiple tokens or assets) as collateral.

• Short selling

Ledger System

Cash + Borrows = Supply + Equity

Follow international accounting standards:

Event	Debit	Credit
Supply Token	Cash	Supply
Withdraw Token	Supply	Cash
Borrow Token	Borrows	Cash
Repay borrows	Cash	Borrows
Liquidate (Borrower)	Supply (Collateral)	Borrows(Asset)
Liquidate ( Caller)	Cash(Asset)	Supply (Collateral)
Accrue Interest (Supply)	Equity	Supply
Accrue Interest (Loan)	Borrows	Equity

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