Creating Positions
As compared with utilisation-based money market protocols (such as Aave, Compound) with “off the shelf liquidity”, Infinity’s interest rate mechanism is established using a two-way order book that matches lenders and borrowers. Interest rates used to benchmark and value your positions on Infinity reference the last traded rate of a contract.
In order to open and close a lending or borrowing position on Infinity, you need to be matched in a two-way market, the opposing side to your order. For example, in order to lend you must be matched with a borrower; as such, there must be the requisite two-way liquidity for each user to open and close a position.
Create a Position
Interest is calculated on an actual days basis, e.g. 365 or 366 days in one year. Interest is paid and received in the token position (e.g. lend ETH, receive interest in ETH). You can lend out tokens from your Trading Account, and borrow tokens against your portfolio-margined assets while maintaining the convention of being overcollateralised (from an asset / liability perspective). For a detailed breakdown of how the portfolio margin system works, the Risk section expands further.
Lend & Borrow page
The “Lend & Borrow” page provides a simplified experience where you can either Lend or Borrow, on either a floating or fixed interest rate, using the Order Form. As Market (Taker) orders remove liquidity from the order book, the executed price may change based on the order size (i.e. slippage) in order to increase the likelihood of fulfilling your desired quantity size.
To initiate a lending or borrowing position, with the Order Form,
Select the Maturity for which you would like to Lend or Borrow, by clicking on the row under “Your Positions”.
Select Lend or Borrow button, input a desired notional quantity (Size) and tolerance of rate slippage (Max Slippage), defined below.
Once inputs are confirmed, you will be prompted with a Confirm Market Order summary, which summarizes your lend or borrow instructions and provides an estimated execution size and interest rate.
Once details are confirmed and you click on “Confirm Order”, upon which your Market order will be submitted and a confirmation message will be returned.
The confirmation message will summarize your actual fill size.
Trade Page
The “Trade” page provides a more robust user-experience. Users can execute both Market (Taker) and Limit (Maker) orders to either Lend or Borrow, on either a floating or fixed interest rate, using the Order Form.
To initiate a lending or borrowing position, with the Order Form,
Select the token you wish to lend or borrow. By default, the GUI will display market details of the token select and show the floating rate market.
Select the side (Lend or Borrow) and your Order Type (Market or Limit). A more detailed explainer of Limit vs. Market orders in the Risk section.
Select the maturity (floating or fixed expiry) and size (quantity).
If you select Market Order, you can modify the Max Slippage (0.10% by default); otherwise this option is not applicable for a Limit Order.
Once details are confirmed, once you click on “Lend” or “Borrow” (depending on your selected side), and you will be prompted with a “Confirm Market Order” or “Confirm Limit Order” page, depending on the order type selected.
Once details are confirmed, once you click on “Confirm Order”, your Market or Limit order will be submitted and a confirmation message will be returned.
Order Form Parameters
| Step | Feature | Description |
|---|---|---|
Order Form | Side | Select Lend or Borrow |
Order Form | Token | Select token |
Order Form | Size | Input quantity |
Order Form | Max Size | Maximum quantity user could Lend or Borrow, based on your Trading Account |
Order Form | Rate | Last traded rate |
Order Form | Max Slippage | Select tolerance from Rate you are willing to accept to fill Size (e.g. Lend at Rate between 2.20% to 2.30%). |
Order Form | Order Type | Select Market or Limit order |
Order Form | Maturity | Select floating or fixed expiry contract |
Confirm Market Order | Estimated Fill Amount | Estimated quantity to be executed based on the Rate & Max Slippage (e.g. if the Max Slippage isn’t wide enough, Estimated Fill Amount would be less than Size) |
Confirm Market Order | Estimated Avg. Rate | Estimated average rate calculates the weighted average interest rate based on Size, from the outstanding Limit orders in the market. |
Market Order Placed | Fill Size | Actual quantity of tokens you have lent/borrowed to/from the market. |
Market Order Placed | Avg Rate | Weighted average interest rate of your lend/borrow position. |
Market Order Placed | Current Status | Done: order was fully filled Partially filled: order was partially filled, with remainder onbook or auto cancelled Canceled: order was cancelled |
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