# Welcome to Pulselend {% content-ref url="/pages/DLR91oMFNAzzxcj5cWH9" %} [Overview](/overview/what-is-pulselend) {% endcontent-ref %} {% content-ref url="/pages/O1Ktx8ODGWxOuMOcWfcE" %} [About PulseLend](/about-pulselend/plend-token) {% endcontent-ref %} {% content-ref url="/pages/uEgrsaCM1ir8NSIA7JIG" %} [User Guides](/user-guides/starting-on-pulselend) {% endcontent-ref %} {% content-ref url="/pages/5Dp5H9KuRCENyjKQBXL7" %} [Protocol Info](/protocol-info/contracts) {% endcontent-ref %} # What is Pulselend PulseLend is an advanced open lending and borrowing DeFi protocol constructed on the PulseChain. Harnessing the power and efficiency of PulseChain, PulseLend V1 is designed to bring about a sea change in the DeFi landscape with a dedicated protocol exclusively created for borrowing and lending. Here are some of the defining features and advantages of the Pulselend protocol: 1. **Scalability and Efficiency:** Constructed on PulseChain, PulseLend delivers high throughput and quick transaction finality, enhancing the user experience and ensuring the platform maintains optimum performance, even during high demand periods. 2. **Reduced Gas Fees:** A notable challenge for DeFi users is the high gas fees tied to on-chain transactions. By leveraging PulseChain's functionalities, PulseLend significantly reduces transaction costs, thus making DeFi more accessible and affordable for a wider audience. 3. **Flexible Lending and Borrowing:** PulseLend provides a range of lending and borrowing options, allowing users to align their strategies with their risk appetite and financial goals. This adaptability encourages financial inclusion and invites participation from users of different backgrounds and requirements. 4. **Security and Transparency:** As an open DeFi protocol, PulseLend emphasizes security and transparency, thereby ensuring users can trust the platform and its underlying smart contracts. This commitment to safety helps position PulseLend as a reliable entity in the DeFi ecosystem. 5. **Incentivized Participation:** The tokenomics structure and staking incentives of PulseLend reward users for their active participation in the platform, nurturing a robust and engaged community. 6. **Decentralized Governance:** By introducing decentralized governance, PulseLend empowers its community to shape the platform's future, ensuring decisions are made in the best interest of users and fostering a self-sustaining ecosystem. The innovative lending and borrowing approach of PulseLend, in conjunction with the benefits of PulseChain's solution, positions the platform as a potential game-changer in the DeFi landscape. Its focus on scalability, cost efficiency, flexibility, and security makes PulseLend an attractive choice for users seeking a reliable and user-friendly DeFi borrowing and lending experience. # Why Pulsechain? Building PulseLend on PulseChain presents a unique opportunity to leverage the advantages of this solution, which align perfectly with the goals of an efficient and accessible DeFi protocol. Here are the reasons why: 1. **Ease of Use:** PulseChain is designed to be user-friendly. The seamless integration with MetaMask wallet means that users only need to change a single setting to access PulseChain. 2. **Lower Fees and Enhanced Capacity:** PulseChain boasts of a higher performance rate than Ethereum, being 17% faster with 10-second block times. This increased efficiency directly translates into lower transaction costs and the capability to serve more users simultaneously, which is crucial for a lending and borrowing protocol like PuLselend. 3. **Environmental Sustainability:** PulseChain replaces proof of work miners with proof of stake validators, thereby eliminating energy wastage. This makes PulseChain, and hence PulseLend, more environmentally friendly, aligning with the increasing emphasis on sustainability in the tech industry. 4. **Improved Game Theory:** PulseChain reduces the issuance of PLS by 25% per block compared to Ethereum. This adjusted inflation model encourages healthier economic dynamics, which can help maintain the value of incentives provided by PulseLend, ensuring the long-term viability of the platform. 5. **Empowering PulseChain Holders:** The native token of PulseChain, $PLS, can be used to activate validators who, in turn, earn PLS for helping to secure the network. This mechanism incentivizes participation in the network's security, promoting a secure and reliable platform for PulseLend operations. This incentive model aligns with PulseLend's aim of fostering a robust, engaged, and secure community. Overall, by leveraging the advantages of PulseChain, PulseLend is setting the stage to offer a scalable, cost-efficient, sustainable, and user-friendly DeFi borrowing and lending experience. # PLEND Token The utility of the PulseLend protocol extends into its native token, PLEND. Here's an outline of the main functions and features of the PLEND token within the PulseLend ecosystem: #### 1. Governance PLEND serves as the primary token for governance within the PulseLend protocol. Owners of PLEND have the ability to participate in shaping the future of the protocol. This empowers users by giving them a say in the decision-making processes of the platform, thus truly decentralizing authority. #### 2. Protocol Support Staking PLEND tokens in the PulseLend Safety Cave offers additional support to the protocol. This safety measure is designed to protect the platform during potential shortfall events, thereby ensuring the robustness and reliability of the system in uncertain times. #### 3. Delegation Capabilities PLEND can also be delegated to a PRC-20 address. This functionality further encourages active participation within the PulseLend ecosystem by allowing users to entrust their voting rights to delegates who they believe can make well-informed decisions on their behalf. #### 4. Incentives and Rewards An additional feature of PulseLend's protocol is its rewards system. Users can earn PLEND emissions and a portion of the fees generated by the protocol, exclusively when they stake their PLEND tokens. This incentive structure rewards active participation and investment in the platform, fostering a vibrant and engaged community. In summary, PLEND's multiple functionalities, including governance, support, delegation, and incentives, serve to enhance the PulseLend protocol's usability and efficiency, fostering a resilient and inclusive DeFi ecosystem. # Tokenomics {% hint style="info" %} **Please be aware that the information provided below is still under revision and may be subject to change.** {% endhint %} ## Token Distribution
GROUP%TERMS/COMMENT
Team and Contributors1212 months clif - 18 months linear unlock
Partners and Advisors1012 months clif - 18 months linear unlock
Market Makers / Liquidity2Liquidity bootstrap / loaned for MM purposes
Sacrifice1550% unlocked on TGE, 25% per month after that (or unlocked fully)
Staking Incentives37Released gradually over 48 months following TGE in line with project needs.
Ecosystem Reserve19Treasury / Reserves. Terms of release will be determined through governance
Community Rewards5Released in line with promotional / Community events.
## Breakdown Our borrow-lending project's tokenomics are designed to promote price appreciation and foster a healthy ecosystem. With a total supply of 10 billion tokens, here's a detailed breakdown of the token allocations: 1. **Staking Incentives (37%)**: We offer substantial staking incentives (3,700,000,000 tokens) to encourage users to lock liquidity on our platform, reducing the circulating supply and positively impacting token price. 2. **Ecosystem Reserve (19%)**: A significant allocation (1,900,000,000 tokens) for the ecosystem reserve supports future development, partnerships, and marketing initiatives, ensuring the project's long-term growth and sustainability. 3. **Community Reserves (5%)**: This allocation (500,000,000 tokens) helps drive community engagement, leading to increased user adoption and network effects. 4. **Team (12%)**: Our team receives a vested interest (1,200,000,000 tokens) in the project's success. To prevent sudden sell-offs, there is a 12-month cliff followed by an 18-month linear unlock schedule for team allocation. 5. **Partners and Advisors (10%)**: Our partners and advisors receive an allocation (1,000,000,000 tokens) with a similar 12-month cliff and 18-month linear unlock schedule. 6. **Initial Liquidity (2%)**: To facilitate trading and user adoption, we have allocated a portion of the tokens (200,000,000 tokens) for initial liquidity. This ensures smooth onboarding for new users. 7. **Sacrifice (15%)**: The public sale allocation (1,500,000,000 tokens) helps distribute tokens to a diverse community of token holders, promoting a wide-ranging user base. Our tokenomics structure aims to support price appreciation through a combination of staking incentives, ecosystem and community reserves, and a carefully planned vesting schedule for the team and advisors. By focusing on these factors, we strive to create a robust and sustainable project that benefits both users and stakeholders. # Emissions PulseLend's token emission model is designed with a focus on price appreciation by applying an exponential decay model for token distribution. This methodology promotes early adoption and creates a sense of scarcity as the emission rate diminishes more rapidly with time. Here's how the emission schedule calculations are formulated: 1. **Determine the Initial Emission Rate:** We considered an initial monthly emission rate of 4.63%, based on the total token supply of 3.7 billion tokens. Thus, the Initial Emission Rate is calculated as: 0.0463 \* 3,700,000,000 = 171,410,000 tokens. 2. **Calculate the Total Tokens to be Emitted in 48 Months:** Over a period of 48 months, the total tokens emitted should be almost equal to the total token supply of 3.7 billion tokens. 3. **Determine the Decay Rate:** The decay rate is identified by finding a value that ensures the total of all emissions over 48 months equals the total token supply. In an exponential decay model, this total can be calculated using this formula: Total Tokens = Initial Emission Rate \* (1 - r^48) / (1 - r), where 'r' is the decay rate. Numerical methods such as the bisection method or the Newton-Raphson method can be employed to find the optimal decay rate. For simplicity's sake, we assumed a decay rate of 0.963 in our model. 4. **Formulate the Emission Schedule:** The emission schedule is formed by multiplying the previous month's emission rate by the decay rate. This method results in a declining monthly emission over the 48-month period, thus encouraging early adoption and establishing scarcity in the market. We adopted the exponential decay model because it aligns with our primary objective of price appreciation. By frontloading token distribution, we can draw early adopters who benefit from the higher initial emission rate. As the emission rate decreases over time, scarcity is induced, which can positively affect the token value. This model encourages a robust token economy, aligning with PulseLend's long-term project goals. | Month | Emission per Month | Total Emission | | ----- | ------------------ | -------------- | | 1 | 171,273,600 | 171,273,600 | | 2 | 164,422,656 | 335,696,256 | | 3 | 157,845,750 | 493,542,006 | | 4 | 151,531,920 | 645,073,926 | | 5 | 145,470,643 | 790,544,569 | | 6 | 139,651,817 | 930,196,386 | | 7 | 134,065,745 | 1,064,262,131 | | 8 | 128,703,115 | 1,192,965,246 | | 9 | 123,554,990 | 1,316,520,236 | | 10 | 118,612,791 | 1,435,133,027 | | 11 | 113,868,279 | 1,549,001,306 | | 12 | 109,313,548 | 1,658,314,854 | | 13 | 104,941,006 | 1,763,255,860 | | 14 | 100,743,366 | 1,863,999,226 | | 15 | 96,713,631 | 1,960,712,857 | | 16 | 92,845,086 | 2,053,557,943 | | 17 | 89,131,282 | 2,142,689,225 | | 18 | 85,566,031 | 2,228,255,256 | | 19 | 82,143,390 | 2,310,398,646 | | 20 | 78,857,654 | 2,389,256,300 | | 21 | 75,703,348 | 2,464,959,648 | | 22 | 72,675,214 | 2,537,634,862 | | 23 | 69,768,206 | 2,607,403,068 | | 24 | 66,977,477 | 2,674,380,545 | | 25 | 64,298,378 | 2,738,678,923 | | 26 | 61,726,443 | 2,800,405,366 | | 27 | 59,257,385 | 2,859,662,751 | | 28 | 56,887,090 | 2,916,549,841 | | 29 | 54,611,606 | 2,971,161,447 | | 30 | 52,427,142 | 3,023,588,589 | | 31 | 50,330,056 | 3,073,918,645 | | 32 | 48,316,854 | 3,122,235,500 | | 33 | 46,384,180 | 3,168,619,680 | | 34 | 44,528,813 | 3,213,148,493 | | 35 | 42,747,660 | 3,255,896,153 | | 36 | 41,037,754 | 3,296,933,907 | | 37 | 39,396,244 | 3,336,330,150 | | 38 | 37,820,394 | 3,374,150,544 | | 39 | 36,307,578 | 3,410,458,123 | | 40 | 34,855,275 | 3,445,313,398 | | 41 | 33,461,064 | 3,478,774,462 | | 42 | 32,122,622 | 3,510,897,084 | | 43 | 30,837,717 | 3,541,734,800 | | 44 | 29,604,208 | 3,571,339,008 | | 45 | 28,420,040 | 3,599,759,048 | | 46 | 27,283,238 | 3,627,042,286 | | 47 | 26,191,909 | 3,653,234,194 | | 48 | 25,144,232 | 3,678,378,427 | This emission schedule assumes a decay rate of 0.963, which results in decreasing monthly emissions, rewarding early adopters, and fostering token scarcity over the 48-month period. We would like to emphasize that the emissions outlined above serve as a reference for our initial plans. We reserve the right to adjust these emissions if we deem it necessary for the improvement and sustainability of the Basilisk protocol. Once our governance system is fully implemented, the control over emissions and other crucial aspects of the protocol will be handed over to the community. This decentralized approach ensures that the future development and growth of Basilisk will be shaped by the collective wisdom and interests of its users, fostering a truly democratic and adaptive ecosystem. Finally we do have a leftover of 21,621,573 tokens that we are planning on using for different events that will be boosting emissions. # PLEND Emissions and Max Liquidity Locking APR **PLEND Emissions** Users who deposit but do not add value to the PulseLend protocol will still earn the standard market rates, but they will not be eligible for **PLEND emissions**. To activate PLEND emissions on deposits and borrows, users are required to **lock a minimum of 5% Liquidity tokens** relative to the size of their deposits (in USD terms). **Examples:** * **User 1:** Makes a deposit of $1M USDC on PulseLend with $0 of Liquidity tokens locked. They earn a base rate (APY) but aren't eligible for incentivized emissions. * **User 2:** Makes a deposit of $1,000 USDC on PulseLend with $50 Liquidity tokens locked. They qualify for PLEND emissions, provided the minimum 5% threshold is met. This approach creates a self-perpetuating cycle that attracts long-term liquidity and rewards those who align with the long-term success of the protocol. **Max Liquidity Locking APR** On the Markets Page, users can review the **Max Liquidity Locking APR** and a breakdown of the APR per asset. **How is the Maximum Locking APR calculated?** * **Definition:** The current maximum Liquidity locking APR for a 1 year lock duration * **Calculation:** The 1 Month Locking APR multiplied by the 1 Year Lock Multiplier (25x) The 1 month locking APR: * **Definition:** The current locking APR for a 1 month duration * **Calculation:** The share of Total 1 Month Locked Annualized Protocol Fees divided by the Total 1 Month Locked share of the Liquidity Pool Size The share of 1 Month Locked Protocol Fees: * **Calculation:** The 1 Month Locked Share of Protocol Power divided by the Total Protocol Locking Power The Total Protocol Locking Power: * **Calculation:** The sum of (1 Month Locked Share of Liquidity Pool Size \* 1 Month Locked Multiplier (currently 1x)), (3 Month Locked Share of Liquidity Pool Size \* 3 Month Locked Multipler (currently 4x)), (6 month Locked Share of Liquidity Pool Size \* 6 month Locked Multiplier (currently 10x)), and (12 month Locked Share of Liquidity Pool Size \* 12 Month Locked Multipler). This gives the Total Protocol Locking Power. # Ensuring Continuous Eligibility for PLEND Rewards **Market movements and the intrinsic volatility of risk assets** may cause a user's eligibility for PLEND rewards to shift over time. **A Practical Example: Varying Eligibility** Take, for instance, Thom, an active PulseLend user. Thom holds Liquidity worth $5 on PulseX (PLEND/PLS) along with $100 in USDC deposits. This composition places Thom well above the 5% threshold, ensuring his eligibility for emissions. However, a 5% dip in the PLS price could reduce the value of Thom's Liquidity under $5, making him fall short of the 5% requirement for earning emissions. To keep track of such shifts, the PulseLend protocol maintains a continuous check on the eligibility status of users, determining "who's in, who's out." **Notifications for Eligibility** When a user meets the eligibility criteria, banners across all pages show "Emissions active." However, if a user's status changes and they're no longer eligible, a "boost inactive" notification appears at the top of each page. This notification indicates the amount of additional Liquidity needed to requalify. To start accumulating $PLEND rewards again, click on "zap into Liquidity" and follow the steps provided. **Strengthening Eligibility Consistency** To heighten the probability of maintaining eligibility for PLEND rewards, it's recommended to maintain a surplus above the 5% threshold as a cushion against potential market volatility. Let's consider another PulseLend user, George. George deposits $1,000 USDC in the money market and locks a minimum of $50 of Liquidity to qualify for PLEND rewards. To protect his eligibility status from market fluctuations, George opts to lock $60 in Liquidity, which is 10% more than the necessary threshold. Furthermore, users can fortify their eligibility status by enabling the **auto-compound and auto-relock** options on the Manage PulseLend page. These automated mechanisms provide additional layers of stability to users' eligibility for PLEND rewards. # Introducing the PulseLend Bounty System PulseLend introduces a unique mechanism for users that maintain the 5% Liquidity eligibility threshold. They can disqualify ineligible users for a bounty, similar to running a liquidation bot, either directly through the user interface or with searcher bots. A "bounty" equivalent to a base bounty is placed on an account, which can be claimed by eligible Liquidity participants. Vigilant users, or 'bounty hunters', can keep track of available disqualification bounties on the *Bounties* page. They can disqualify ineligible users by selecting "claim" and confirming the transaction. This disqualification system prevents accounts with expired Liquidity from receiving unearned platform fees and stops ineligible users from receiving $PLEND emissions that fall below the 5% Liquidity threshold. Additionally, bounty hunters receive a base bounty for relocking Liquidity for users that have enabled "auto-relock", and for performing auto-compounds on behalf of users that have enabled this feature. This method not only decentralizes actions taken on the protocol but also rewards users for removing ineligible participants. It benefits both the protocol and the participants themselves. To minimize the risk of disqualification, users are advised to maintain their Liquidity threshold above 5%. Disqualifications due to expired locked Liquidity can be avoided by enabling the “auto-relock” function on the Manage page. ### Additional Points to Note * Bounty hunters must maintain the 5% Liquidity threshold status and have deposited assets to claim bounties. * Claimed bounties are paid in Vesting PLEND. * The base bounty is dynamic and depends on searcher bot demand and the price of $PLEND. * Bounties are prioritized so that only one bounty per account is available at a time, although there can be up to three bounty types: 1. The primary priority is given to expired lock treatment (removing expired locks from the pool or re-locking Liquidity with auto-relock enabled). This prevents the account from continuing to receive unearned platform revenue. The bounty for removing an expired lock equals the base bounty. 2. The secondary priority is given to preventing accounts from continuing to receive unearned PLEND emissions that fall below the 5% eligibility threshold. The bounty for emissions ineligibility equals the base bounty. 3. The final priority is given to auto-compounding. When an auto-compound event is triggered, the protocol outsources the execution of the transaction to bounty hunters. AutoCompound bounties are funded by the fee paid by the user that will be compounded. This amount starts small and increases over time as more pending rewards accrue to be compounded. * Self-disqualification: performing an on-chain action within the Dapp (deposit/claim/lock) will trigger a disqualification if the user falls short of the parameters outlined above. # PulseLend Sacrifice Event We are thrilled to announce our upcoming PulseLend Sacrifice Event (PSE) for the PulseLend protocol. The PSE will be conducted in an innovative and community-focused manner, ensuring that the price of our token is determined directly by our community members. Here is a comprehensive explanation of how the PSE will unfold: **Token Pool** A pool of 1,5 billion PulseLend tokens will be available for distribution to users who commit Pulse (PLS) during the PSE period. **PSE Duration** The PSE will span 72 hours, during which users can commit PLS to participate in the token distribution process. **Contribution Weighting** To incentivize early participation, the contributions will have a decreasing weight factor every 6 hours. The weight will start at 3 and decrease by a factor of 0.25 every 6 hours, reaching 1x weight on the last day of the PSE period. **Token Distribution** Once the 72-hour period concludes, the 15 million PulseLend tokens will be distributed proportionally among all users who committed PLS. The distribution will be based on each user's weighted contributed PLS amount relative to the total weighted PLS committed by all participants. **Initial Liquidity** A percentage of the PLS collected throughout the PSE will be utilized to provide initial liquidity for the PulseLend token. This approach ensures a fair and organic price discovery process, as the initial token price will be determined by the community's engagement and commitment. **Community-Driven Price** By adopting this PSE model, we are empowering our community to directly influence the PulseLend token's initial price. With no predetermined or fixed price for the token, a truly democratic and decentralized price discovery mechanism emerges. **Example:** Let's assume four users participate in the PSE: * User A contributes 1000 PLS within the first 6 hours (3x weight) * User B contributes 1000 PLS between the 18th and 24th hours (2x weight) * User C contributes 1000 PLS between the 42nd and 48th hours (1.25x weight) * User D contributes 1000 PLS on the last day (1x weight) The total raised is 100000 PLS, and each of the four users contributed 1000 PLS. However, the effective contributions, after applying the weight factors, are: * User A's effective contribution: 1000 PLS \* 3 = 3000 PLS * User B's effective contribution: 1000 PLS \* 2 = 2000 PLS * User C's effective contribution: 1000 PLS \* 1.25 = 1250 PLS * User D's effective contribution: 1000 PLS \* 1 = 1000 PLS These effective contributions will be used to calculate each user's share of the 1,5 billion PulseLend tokens being distributed. We firmly believe that this community-driven approach to our PSE will result in a more transparent, equitable, and captivating experience for our users. We eagerly anticipate your participation and support as we collaborate to establish a dynamic and sustainable ecosystem for the PulseLend project. No private sale has been conducted. # Governance Introducing governance to our project paves the way for decentralization, granting our community the power to actively participate in the platform's evolution. Here are some key governance use cases to consider as examples of the benefits offered to users: 1. **Protocol Upgrades:** Community members have the opportunity to vote on proposed enhancements and updates to the protocol, ensuring the project remains innovative and adapts to the needs of its users. 2. **Parameter Adjustments:** Token holders can propose and vote on changes to essential platform parameters, such as collateralization ratios, interest rates, or token emissions. This allows for fine-tuning the project's mechanics to achieve optimal performance and stability. 3. **New Asset Integration:** Users can participate in the decision-making process to add new assets to the platform, promoting a diverse range of available assets and guaranteeing popular or promising assets are considered for inclusion. 4. **Funding Proposals:** The community can influence the allocation of resources by voting on funding proposals for development, marketing, partnerships, and other initiatives, ensuring alignment with users' interests. 5. **Treasury Management:** Token holders have the ability to contribute to the project's treasury management, including deciding on investment strategies or allocating funds for specific purposes. 6. **Dispute Resolution:** A decentralized governance system offers a transparent and fair voting process to address disputes or disagreements within the community. 7. **Community Initiatives:** Governance facilitates community-driven initiatives, such as educational programs, outreach events, or developer grants, encouraging community involvement and nurturing a robust ecosystem. By implementing these governance use cases, our project aims to empower the community, leading to a decentralized and adaptable platform that evolves according to user needs and preferences. # Starting on PulseLend # Contracts TBA # Protocol Information **Protocol Math** APY = normalizedEmissionPerSecond \* rewardTokenPriceInPLS \* seconds\_per\_year / normalizedTotalTokenSupply **Supply APY** Supply APY refers to the interest rate received by users who provide assets to the platform. Users earn a percentage of the supplied asset, which accumulates automatically. This rate is determined by the "Supply APY" value, which fluctuates based on the ratio of supplied assets to borrowed assets (market utilization). For instance, a user supplying PLS to PulseLend may earn additional PLS tokens. A situation with a large supply and low borrowing may result in a lower supply APY, as there is less demand for borrowing. Conversely, a higher borrowing rate coupled with a lower supply could lead to a higher supply APY to encourage users to provide more assets to the platform. **Example of Supply APY:** When you provide $1,000 USDC to the platform, and the USDC Supply APY stands at 10%, you can expect to earn approximately $100 in USDC interest over the course of a year, which is paid by the borrowers. **Borrow APY** The Borrow APY represents the interest rate applied to users who take out a loan using an asset, indicating the cost they will incur for borrowing. Presently, this rate is counterbalanced by the distribution APY rewards (currently awarded in PLEND on PulseLend). In certain uncommon scenarios, the rate may be advantageous enough that users could potentially earn rewards not only for providing assets but also for borrowing them. **Example of Borrow APY :** When you take out a loan of $1,000 USDC with a USDC Borrow APY of 10%, over the course of a year, you will accumulate around $100 in USDC interest. Consequently, your outstanding loan balance will be approximately $1,100. **Collateral factor** The maximum that can be borrowed on a particular asset. **Example of Collateral Factor:** The collateral factor for PLS is 60%. When you deposit $1,000 worth of PLS as collateral, you can borrow up to $600 in other assets. Please be aware that it is strongly advised to stay below 80% of your borrowing limit. In this example, it would be best not to borrow more than $480 ($600 \* 80%). Exceeding 80% of your borrowing limit significantly increases the risk of liquidation. **Reserve factor** The proportion of a borrower's interest payment that is allocated to the PulseLend protocol reserves. **Example of Reserve Factor:** You borrow $1,000 in USDC. The USDC Borrow APY is 10%. After one year, you repay approximately $100 in interest. The Reserve Factor is set at 20%. Out of the $100 interest payment, $20 is directed to the PulseLend protocol reserves. **Close factor** The maximum amount of an outstanding borrow that can be closed in a single liquidation event. **Example of Close Factor:** Your Health Factor falls below 1, indicating that your account is subject to liquidation. At the moment, you have borrowed 1000 USDC, with a Close Factor of 50%. A liquidator repays half of your outstanding loan (500 USDC) and claims an equivalent sum from your collateral, along with the liquidation incentive. # Liquidations ## Liquidation Incentives Extra collateral is provided to liquidators as a motivation to carry out liquidations and maintain the protocol's solvency. A part of this collateral is allocated to the sToken reserves in accordance with the protocol's seize share, mitigating the possibility of insolvency due to a chain reaction of liquidations. The Liquidation Incentive amounts to 10% of an under-collateralized account's outstanding debt, with 30% of that sum being returned to the protocol reserves. The liquidation incentives will steadily increase over time to entice engagement, beginning at 10% plus a premium to allow the discount to rise as a function of how under-water a position is. The market forces will dictate how high it needs to be. # Audits PulseLend has been developed with security and reliability as our top priorities. Our PulseLend contracts are fork of the reputable Compound protocol, ensuring a solid foundation for our platform. The vesting contracts and the locking ones are a fork of the Radiant protocol which has been through multiple audits as well. #### Ongoing Audit and Security Measures To further enhance the security of PulseLend, we are currently in the process of starting a comprehensive audit. We will share the results with our community as soon as they become available. In addition to the manual audit, we have utilized multiple vulnerability scanners to rigorously assess our contracts. This multi-layered approach to security helps us reinforce the robustness and trustworthiness of the PulseLend protocol, providing our users with a safe and reliable DeFi experience. # Oracles and TWAPs Right now there are no oracles launched on PulseChain. Due to that reason we will be using only TWAPs for price info since there is sufficient liquidity in the network and on PulseX exchange. However we will diversify our model to also include Oracles as soon as reputable ones have been launched on PulseChain for extra security.