Risk Management

Crypto assets also carry a certain amount of risk. Regarding the loan, a potential loss in value of the crypto assets may lead to a liquidation. To avoid a liquidation, FERO CASH offers clients different options.

Option I: Add Additional Crypto Assets

Clients have the option to transfer additional crypto assets to the FERO Protocol to rebalance their loan limits. The FERO Oracle automatically calculates the additional crypto assets required and, once the transfer is confirmed, updates the client's loan limits instantly. Clients can safely withdraw any excess crypto assets from their wallet once the loan is repaid or when they have surplus assets available.

Option II: Partial Repayment

Clients can also choose to repay the difference between the loan limit and the outstanding loan balance. In this case, the FERO Oracle calculates the amount needed, and the client can pay via bank transfer or by transferring crypto assets. While the FERO Oracle will notify the client of any changes in the value of their crypto assets, it is important to note that the client might not act upon these notifications. If no action is taken, the FERO Oracle will automatically cover the difference between the loan limit and the current loan balance by performing a rebalancing maintenance.

Rebalancing Maintenance

If the client does not respond to the notifications from the FERO Oracle and fails to transfer additional crypto assets or repay the required amount, the FERO Oracle will perform a rebalancing maintenance. The value of the pledged crypto assets will be checked across multiple exchanges to ensure the best possible terms are secured. In this case, the FERO Oracle will use the best available market price and sell crypto assets to rebalance the loan limits. Any relevant taxes related to the transaction will be covered by the client's loan.