GUSD Module

Borrow

Collateral Asset Types

• Stablecoin Assets:

  • USDC, USDT, and other approved stablecoins

• Non-Stablecoin Assets:

  • GR tokens as primary collateral

  • Expandable Collateral: Warped BTC, SUI

  • Additional types permissible through governance proposals

Minting Ratios

• Stablecoin Assets:

  • 100% collateralization ratio

  • 1:1 minting

• GR Tokens:

  • Maximum 85% loan-to-value ratio (LTV)

• Other Non-Stablecoin Collateral:

  • LTV determined by risk assessment

Minting Protocol

1. User deposits supported collateral into smart contract

2. System validates collateral value against current parameters

3. Corresponding GUSD minted to user's wallet

4. Debt position recorded with collateral-to-debt metrics

Minting Caps

• Global Cap: System-wide maximum GUSD issuance

• Collateral-Specific Cap: Maximum issuance per collateral type

• Per-Address Cap: Maximum issuance per user address

Repay

Voluntary Repayment

• User returns GUSD to debt position

• System burns GUSD and releases proportional collateral

• Accrued stability fees collected for non-stablecoin positions

Partial Repayment

• Users can repay a portion of debt

• Receive proportional collateral release

Liquidation Process

• Applicable only to non-stablecoin collateral

• Triggered when non-stablecoin collateral value depreciation causes Health Factor to fall below liquidation threshold

• Liquidators purchase under-collateralized collateral by burning equivalent GUSD

• Liquidators receive 7% collateral discount as incentive

Emergency Shutdown

• Governance can activate Global Settlement under extreme market conditions

• Collateral returned proportionally

Health Factor

Universal Application

• Cross-margin account monitoring for all collateral types (GR, SUI, USDC)

• Multi-collateral support with weighted average calculation

Calculation Formula

Health Factor = (Total Collateral Value × Weighted Average Liquidation Threshold) / Total Debt Value

Weighted Average Liquidation Threshold = Σ(Individual Collateral Value × Individual Liquidation Threshold) / Total Collateral Value

Individual Liquidation Thresholds

• GR tokens: 90%

• SUI tokens: 60%

Risk Classification

Health Factor	Risk Zone	Description
> 1.25	Safe	Account secure, additional borrowing permitted
1.10 - 1.25	Warning	Position stable, requires market monitoring
1.05 - 1.10	Danger	Approaching risk territory, increase collateral or reduce debt
1.01 - 1.05	High Risk	Critical risk, immediate action required
≤ 1.00	Liquidation	Account eligible for liquidation

Liquidation

Liquidation Eligibility

• Applicable only to non-stablecoin collateral (GR tokens)

• Trigger: Health Factor falling below liquidation threshold

• Continuous monitoring via oracle price feeds

Liquidation Mechanics

1. Liquidator calls liquidation function

2. System verifies position eligibility

3. Atomic liquidation transaction executed

Discount Calculation

Liquidation Price = Market Price × (1 - Liquidation Incentive)

Partial Liquidation Protocol

• Maximum 50% collateral liquidatable per transaction

• 2-block waiting period between liquidations

• Complete liquidation allowed when Health Factor < 1

Liquidation Queue Management

• Positions ranked by Health Factor (lowest first)

• Timestamp used as tiebreaker

• Queue refreshed with each oracle update

Anti-Frontrunning Measures

• Minimum 3-block confirmation for oracle updates

• Maximum gas price cap during high volatility

• Whitelisted liquidator network during extreme conditions

Backstop Liquidation Mechanism

• Activation when positions remain under-collateralized > 1 hour

• Protocol Insurance Fund acts as liquidator of last resort

• Executed at market price without discount

Conclusion

This comprehensive system ensures protocol solvency while providing fair opportunities for position recovery. The tiered approach balances liquidator incentives with position owner protection, maintaining stability during market volatility.