FAQ
General Questions
Q: What is Folks Finance?
A: Folks Finance is a decentralized finance (DeFi) platform that offers cross-chain lending and borrowing services, utilizing a hub-and-spoke architecture to provide efficient liquidity and seamless cross-chain interactions.
Q: How does the cross-chain functionality work?
A: Folks Finance uses a hub-and-spoke model, where the hub chain stores the entire state of the protocol, and spoke chains act as entry points for users. Cross-chain communication is facilitated using protocols like Wormhole, Chainlink CCIP, and Circle CCTP.
Q: What are the main features of Folks Finance?
A: Key features include cross-chain lending and borrowing, unified liquidity pools, advanced lending options like collateral swaps, and an innovative incentive model designed for sustainability.
Q: What is "Waiting relay"?
A: Waiting Relay indicates that a transaction has been initiated from a spoke chain and is awaiting delivery to the hub chain via the Generic Messaging Protocol (GMP) such as Wormhole or Chainlink CCIP. For certain operations like deposits, collateralization, and repayments, the waiting time is longer as it requires achieving finality on the spoke chain where the operation was initiated. The Waiting Relay is necessary because it avoids potential risks such as double spending by ensuring that a transaction has been fully confirmed on the source chain before proceeding.
Account Management
Q: What is the difference between inviting and linking an address?
A: Inviting an address requires the invited address to accept the invitation to gain access, providing extra security. Linking an address adds the address immediately without needing approval, offering quick access. Linking addresses is the easiest way to connect chains from the same wallet. Inviting addresses is useful when connecting chains from different wallets.
Q: How do I invite an address to my account?
A: Navigate to the account management section, send an invitation to the desired address, and wait for the address to accept the invitation.
Q: How do I link an address to my account?
A: Submit a "link address" transaction from your spoke chain, and the address will be added immediately without needing further approval.
Lending and Borrowing
Q: How are interest rates determined?
A: Interest rates are dynamically adjusted based on the utilization ratio. Borrowers can choose between variable and stable interest rates.
Q: What is the utilization ratio?
A: The utilization ratio measures how much of the available pool of assets has been borrowed compared to the total deposited.
Q: How does the liquidation process work?
A: Liquidation occurs when the total borrowed amount exceeds the borrowable amount. Liquidators repay the under-collateralized position and receive a bonus in the form of collateral.
Security
Q: What security measures are in place?
A: Folks Finance employs regular smart contract audits, bug bounty programs, rate limits on value transfers, and comprehensive error handling and recovery mechanisms to ensure the safety and integrity of the platform.
Q: What are rate limits?
A: Rate limits define the maximum value that can be transferred out of the protocol within a specified period to minimize risk and potential losses.
Technical Details
Q: How does cross-chain communication ensure finality?
A: For operations like deposits and repayments, finality is awaited on the spoke chain before relaying messages to the hub chain to prevent transaction reversal or alteration.
Miscellaneous
Q: Is there a minimum amount required to use Folks Finance?
A: There is no minimum amount required, making the platform accessible to everyone.
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