🏦What is CoachAI Bank?

Before using CoachAI Bank it is recommended that you read our guide on crypto loans and risk management.​

CoachAI Bank is our decentralized lending and borrowing platform built on the Binance Smart Chain. Users are able to lend out and borrow a variety of crypto assets. Lenders can achieve an attractive APY without any risk of volatility of the CADT price by lending out stable coins. Borrowers can use wsCADT as collateral to borrow stablecoins to use them in different projects without having to unstake or unwrap their tokens.

The protocol charges a small amount of interest on borrowed positions. A portion of this profit is then used in line with our plans to become deflationary over time - tokens will be bought and burned.

CoachAI Bank was built in partnership with Ola Finance.

Crypto Loans and Risk Management

There is a very common saying in the markets:

Never risk more money than you can afford to lose. This is equally true for lending and borrowing platforms like CoachAI Bank. This guide will explain some key terms and give an overview on how to use CoachAI Bank whilst keeping risk to an acceptable level. This guide is meant for educational purposes only, and does not constitute financial advice. Key Terms

Collateralisation

Collateral is the capital or value put up to secure a loan. For example: when taking a loan of BSC tokens worth $100 it is common practice to put up tokens of value to secure the loan. When the value of the collateral is less than the value of the borrowed tokens, this is called an undercollateralised loan. When the value of the collateral is higher than the value of the borrowed tokens, this is called an overcollateralised loan. Overcollateralised loans are considered safer, and are used by CoachAI Bank.

Overcollateralised Loan

CoachAI Bank offers Overcollateralised Loans. An Overcollateralised Loan is a loan wherein the collateral put up to secure the loan is worth more than the tokens borrowed. The amount of collateral required for a given loan depends upon that token's collateral factor.

Collateral Factor

The ratio which determines how much collateral is required to take out a loan of a given token. For example, if a user supplies 100 DAI as collateral, and the collateral factor for DAI is 60%, then the user can borrow assets worth 60 DAI (60% of the collateral supplied).

Collateral factors can vary from token to token.

Liquidation

When the value of a borrowed position exceeds the amount allowed by the collateral factor, liquidation will happen. At CoachAI Bank, a borrow position will be partially liquidated to rebalance the loan. When a loan is liquidated, a liquidation incentive is also charged to the loan. For wsCADT, this is 12%. For all other loans it is 10%.

Liquidation Factor

The Liquidation Factor is the rate at which loans are liquidated when they become undecollateralized. CoachAI Bank has a liquidation factor of 50%. This means that if you borrow tokens, once the value of the loan rises above 50% of the value of the collateral, the loan may be liquidated. The amount of the loan liquidated is determined by the Close Factor.

Close Factor

The Close Factor is the amount of an undercollateralised loan which is liquidated. CoachAI Bank has a Close Factor of 50%. This means that in the event of a liquidation, 50% of the position will be liquidated to cover the debt.

Interest

To keep a borrowing position open, a compounding interest rate is applied at each network block. This means that to repay a loan, you will need a larger value of tokens than were borrowed. Interest rates at CoachAI Bank can vary but are usually about 2%.