Umee. Platform Management
Umee is a decentralized infrastructure for cross-network interaction between networks. Umee connects users to create lending and borrowing positions, move capital between blockchains, discover new revenue opportunities, and explore DeFi crosschain applications in a seamless and reliable way.
Users can lend assets. Lenders and Liquidity providers can be the same users. They will receive interest based on the asset that they lend. Once lenders deposit assets into the Universal Capital Facility, they will receive a uToken collateral token. These uTokens will represent the assets lent as well as the earned interest through lending the assets. Depositors of assets into the Universal Capital Facility will receive ERC 20 compliant uTokens when depositing assets onto the Ethereum side, and IBC based uTokens when depositing assets on the Cosmos side. These uTokens can be transferred between Cosmos and Ethereum via the Gravity Bridge.
In order to establish any of the borrowing scenarios, sufficient collateral must be deposited to ensure the necessary levels of overcollateralization. uTokens and meTokens will be the collateral used to establish borrowing as they are direct indicators of collateral that is deposited into the Asset Facilities.
Users will be able to use their uTokens and meTokens as collateral for borrowing assets from the Universal Capital Facility. Users can use the collateral tokens for borrowing any asset deposited on the Universal Capital Facility that has sufficient reserves. This includes both Cosmos as well as Ethereum assets.
Collateral Manager protocols keep track of collateral affiliated with Borrow Positions. They will ensure that the LTV ratios are sufficient to ensure overcollateralization of the Capital Facility network. Borrow Positions will have diversified collateral.
Borrow Position Collateral Management
Collateral management in this system will be determined by the underlying health factors of the pools that users borrow from. Because some assets are more volatile or have lower market caps than others, higher levels of overcollateralization will be necessary for opening Borrow Positions with them.
Liquidation Managers initiate the process of moving assets into an auction market where keepers can choose to auction for undercollateralized Borrow Positions.
If the LTV’s fall below the necessary threshold of overcollateralization, Liquidation managers will receive instructions from Collateral Managers to begin the process of selling assets on the open market. Assets will sell at a heavy discount to incentivize immediate purchase. Borrowers can prevent this process by adding additional collateral tokens in order to ensure healthy overcollateralization.
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