The crypto market is volatile, and if the protocol does not implement sufficient risk control, it can cause losses to both the protocol and users.
FilDA's risk control system has a four-layer framework as follows:
The assets in the market must have sufficient trading depth in HECO DEX or Huobi Global, and the assets that can be liquidated can be pledged.
In the initial stage of FilDA’s launch, in order to control risks and protect user property safety, the asset pledge rate was only 10%. After a period of steady operation, FilDA adjusted the pledge rate with reference to Huobi Global, and the average pledge rate was lower than that of the top 3 exchanges as well as top DeFi projects. Parameters such as pledge rate will gradually open to DAO governance.
The FilDA liquidation market is completely open, the code is open source, and the documents are open. Any on-chain liquidation contract can be processed within the rules to ensure fair market competition, smooth liquidation process and minimum risk.
The DAO pool is upgraded from the original insurance pool. Users who voluntarily choose to participate in the DAO pool enjoy the rights of FilDA mining, voting governance, and dividends, as well as the liability as of the final insurer in the market. For extreme market conditions and market liquidity problems, if deposit users suffer losses, part of the assets of the DAO pool will compensate depositors with a specific proportion. DAO governance can set proportion parameters, the maximum is 50%, and the minimum is 20%.