# Debt System

## Debt

### 1. Minting debt

After the user stakes native assets to mint synthetic assets, the amount of synthetic assets minted is their minting debt. A user minted 100 USDP by staking some ATP tokens. In the mean time, it also generated 100 USDP minting debt.&#x20;

### 2. Stabilization debt

Stabilization debt is a stability fee designed based on mortgage rates. It is also one of the components of the debt system and affects the current mortgage rates. Each account is required to pay a stability fee based on the difference between the liquidation price and the current price as well as the time period, at the time of the increasing/withdrawal of collateral, minting, debt repayment and liquidation. The stability fee is paid in the form of synthetic assets.



### 3. Debt Positions

Pumo will list all debt positions of users wallet. PUMO v1.0 has two kinds of debts：aETH - USDP and ATP - USDP. The main indicators of the debt positions interface include：

1）Quantity/Value of the Underlying Asset：Display the current amount of underlying assets staked. Value = Quantity \* oracle price of the underlying asset against USDT.

2）Quantity/Value of the Synthetic Asset：Display the current amount of synthetic assets minted. Value = Quantity \* oracle price of the synthetic asset against USDT.

3）Stability Fee：Refer to the definition description of "stability fee" above.

4）Mortgage Rate：Mortgage rate = （Minting debt + Stability Fee）/ Underlying Asset Value \* 100%；

5）Liquidation Rate：When the real-time mortgage rate is greater than or equal to the liquidation rate, the user's debt position can be liquidated；

6）Liquidation Price：Liquidation Price = （Minting debt + Stability Fee）/ （Liquidation Rate \* Underlying Asset Value）；

7）Status：Displays the risk profile of each position, including pending liquidation, alert, monitoring and healthy.

### 4. Debt Positions Liquidation Alert

When a user minted a synthetic asset, the real-time mortgage rate will change as the price of the underlying asset floats. When the real-time mortgage rate is greater than or equal to the liquidation rate, the user's debt position can be liquidated. Therefore, we added the a risk status indicator of the debt position in the UI interface to show how healthy of user's current debt position.

1）Pending Liquidation：real time mortgage rate ≥ liquidation rate；

2）Alert：liquidation rate ≥ real time mortgage rate ≥ initial mortgage rate；

3）Monitoring：initial mortgage rate ＞ real time mortgage rate ≥ initial mortgage rate \*70%；

4）Healthy：initial mortgage rate \*70% ＞ real time mortgage rate。

