Minting Fees

You will incur a minting fee when you borrow cUSD against your collateral. This fee is charged whenever the cUSD is withdrawn from the vault.

This is a one-time fee charged at the time of borrowing, and the amount is added to your debt balance.

The minting fee is determined by the base rate multiplied by the amount borrowed by you.

The base rate is determined algorithmically and is confined between a range of 0.5% - 5%.

In addition, there is a 20 cUSD liquidation reserve charge that will be applied to each debt balance, regardless of how much was borrowed. This is also added to the debt position and is refunded upon repayment of all outstanding debt.

Example:

User Bob wants to borrow 10,000 cUSD against his collateral when the base rate is 0.5%.

After withdrawing 10,000 cUSD from the vault, his total debt balance will be 10,070 cUSD (10,000 cUSD + 20 cUSD + 50 cUSD).

Bob now repays 10,070 cUSD, which is the entire debt balance, and will be refunded 20 cUSD, which is the amount held for the liquidation reserve.