Common Questions, Clear Answers

RUJI Money Market is Rujira's decentralized lending and borrowing marketplace for crypto assets.

Lenders can earn interest on their tokens, while borrowers can use their crypto as collateral¹ to take out loans.

You can access it here:
Lending: Earn opportunities
Borrowing: RUJI Money Market

For a full overview, visit the [RUJI Money Market docs](https://docs.rujira.network/core products/ruji money market).

CDP stands for Collateralized Debt Position. It is a way to borrow crypto by locking up other crypto as collateral, and it is always overcollateralized¹, meaning you must deposit more value than you borrow.

Here is how it works:
You deposit crypto such as BTC, ETH, or XRP as collateral.
Each collateral type has a collateral ratio², which is a risk adjusting factor used to determine how much you can borrow.
For example, if BTC has a collateral ratio of 70%, you can borrow up to $70 for every $100 worth of BTC.
You borrow a different token or a stablecoin³ such as USDC or USDT.
Your loan stays open as long as your adjusted collateral value remains above the value of your debt.
If your collateral value drops too much, part of it can be liquidated to repay some of the debt and bring the position back to a safer level.

The interest rate changes based on how much of an asset is already borrowed.

If most of the asset in the vault is borrowed, meaning the utilization rate¹ is high, the interest rate rises.

If more assets are added to the vault, or borrowed assets are repaid, the rate falls.

You borrow from other users who deposited their assets into lending vaults.

Every token you borrow comes from users who chose to lend their assets out. The interest you pay goes directly to those lenders, minus a 10% protocol fee, and is distributed pro rata based on each lender's share of the total deposits.

Collateral Ratio
This is the risk adjusting factor applied to the value of your collateral to determine how much you can borrow. For example, if BTC has a collateral ratio of 70%, you can borrow up to $70 for every $100 worth of BTC.

Adjusted LTV (Loan to Value)
This shows how much you borrowed compared to your adjusted collateral value. If your Adjusted LTV reaches 100%, your position becomes at risk and can begin to be liquidated.

Liquidation Price
This is the price at which your collateral would begin to be sold to repay your loan and protect the solvency of the system.

If your loan gets liquidated, part of your collateral is sold on RUJI Trade, Rujira's orderbook DEX, and the proceeds are used to repay part of your debt.

How much is sold depends on the liquidator, but with the current parameters, the liquidation should normally bring your position back to an Adjusted LTV somewhere between 90% and just under 100%.

In practice, liquidators are usually incentivized to liquidate as much as possible, so most liquidations will likely bring the position closer to 90% than to 100%.

One exception is for very small positions. Those may be liquidated in full, because rounding constraints can otherwise make them impossible to liquidate.

A collateral swap is a special Rujira feature that lets you swap the collateral locked in your loan without closing the loan itself.

For example, if you borrowed USDC using BTC as collateral, you can swap your BTC collateral for another token directly, without repaying the loan first.