Introduction to Mars Protocol

Mars is a pioneering credit protocol designed for the future: decentralized, self-sovereign, inter-chain, non-custodial, open-sourced, and community-governed. It features the "Red Bank," which facilitates overcollateralized loans with a two-slope interest rate model, akin to those used by Aave or Compound.

For more detailed information, visit their documentation site (opens in a new tab).

Lend on Mars

To start lending on Mars, follow these steps:

  1. Access Mars: Navigate to the Mars Protocol (opens in a new tab).
  2. Connect Your Wallet: Connect the wallet that contains your milkTIA tokens.
  3. Create Credit Account: Click on "Credit Account," then click on "Create," and confirm the transaction. If you already have a Credit Account, skip this step.
  4. Fund Credit Account: Select milkTIA, enter the amount you wish to fund, and confirm the transaction.
  5. Lend milkTIA: Go to the "Earn" page, select milkTIA, click "Lend," input the amount you wish to lend, review, and confirm.

Borrow on Mars

After lending your milkTIA tokens as collateral, follow these steps to borrow on Mars:

  1. Borrow: Go to the "Borrow" page, select the asset you wish to borrow, and enter the amount. Note: milkTIA itself cannot be borrowed.
  2. Confirmation and Monitoring: Confirm the transaction. Once processed, you'll receive the borrowed assets for use in other DeFi opportunities, and you can monitor your position's health directly on your "Portfolio" page.

Risk Parameters

For milkTIA, the following risk parameters were set at launch per #169 Governance Proposal:

  • Max. LTV: 48.5%
  • Liquidation LTV: 50%
  • Deposit Cap: 50,000 milkTIA

Note: These risk parameters may change, so ensure you stay updated with the latest information when interacting with the protocol.

Tips for Using Mars Protocol

  • Prevent Liquidation: Constantly monitor your health factor on the "Portfolio" page to mitigate liquidation risks. Mars' blog offers insights on calculating the liquidation threshold and understanding liquidation circumstances.
  • Interest Rates: Interest rates can fluctuate. Regularly checking them will help ensure your lending strategy remains profitable.
  • Stay Informed: The DeFi space is continuously evolving. Stay updated with Mars Protocol’s developments and general DeFi trends.

Disclaimer: This is not financial advice. Perform your due diligence before participating in any protocols mentioned.