To borrow assets on Tonka, users deposit their tokens as collateral before borrowing. Tonka supports various assets for collateral. After depositing tokens, the user receives tToken, for example, ORDI to TORDI. tToken represents the user's ownership of underlying tokens and interest accrued on a block basis. The quantity of tToken received is based on the current exchange rate and the supplied underlying assets amount. The initial exchange rate between tokens and tTokens is 1:50. Each tToken is convertible into an ever increasing quantity of the underlying token, as interest accrues in the market.

When users wish to redeem their tToken for underlying tokens, they can do so based on the exchange rate.

The exchange rate between a tToken and the underlying asset is calculated as follows:

Here, "total cash" represents the total amount of cash available in the contracts, "total borrows" represents the total amount of borrowed tokens, "total reserves" represents the reserved tokens, and "total supply" represents the total supply of tTokens.




Web3 1.0

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