Ruler Protocol Coin Price & Market Data
Ruler Protocol price today is $23.80 with a 24-hour trading volume of $47,819. RULER price is up 0.1% in the last 24 hours. It has a circulating supply of 110 Thousand RULER coins and a max supply of 1 Million. If you are looking to buy or sell Ruler Protocol, Sushiswap is currently the most active exchange.
What is RULER?
RULER is the governance token for Ruler Protocol.
How to obtain RULER?
You can purchase RULER from Sushiswap.
What is Ruler Protocol?
Ruler Protocol only offers fixed-term loans that are decided beforehand by the team in the form of series. For example, there can be loans expiring at the end of March and loans expiring at the end of June. Users have limited flexibility in choosing the loan terms or end date.
The loan product has the following features:
No liquidations as long as borrowers pay back on time
Interest rates determined by supply and demand
Fungible, tradable in the secondary market
Ruler Protocol is created by the same team that created Cover Protocol.
What are Mint Ratio and Collateral Ratio?
Users can deposit assets to borrow DAI. The mint ratio refers to how much DAI users will receive after depositing one unit of the asset. The collateral ratio is the price of the collateral divided by the amount of DAi borrowed.
Using the wBTC as collateral, users can mint 25,000 DAI by depositing one wBTC. The loan will expire on 31/3/2021 with an expected interest rate of 30.75% annualized.
As the price of wBTC will change every day, the collateral ratio will change accordingly. The borrowing will be halted when the price of wBTC is lower than the mint ratio.
What are Ruler Pairs?
Using the same example, below is the relationship of Ruler Pairs with the collateral.
1 WBTC = 25,000 rcTokens + 25,000 rrTokens before expiry
Like how Cover Protocol works, users can deposit assets to mint two tokens - Ruler Capital Token (rcToken) and Ruler Repayment Token (rrToken).
1 rcToken ≈ 1 DAI at expiry
Borrowers will have to sell the rcToken to obtain DAI.
There is a yield farming program to incentivize the LP token of rcTokens with DAI to bootstrap liquidity. The price of the rcTokens sold decides the borrowing interest rate. As such, the borrowing interest rate is decided by the market and fixed once it is sold.
The lender will be able to claim 25,000 DAI by depositing 25,000 rcToken to the platform.
25,000 rrToken + 25,000 DAI ≈ 1 WBTC at expiry
To claim back the wBTC, the borrower will have to pay back both rrToken and DAI before the expiry date. There is no liquidation even if the collateral ratio is below 100%. Besides default risk, lenders will have to bear the risk of collateral price falling below the mint ratio.
rcToken provide the right to collect the loan payment after expiry.
rrToken provide the right to claim back the collateral after the loaned DAI is repaid.
What happens if the borrower chooses to default?
If the borrower does not pay after the expiry date, the collateral is liquidated and split pro-rata among the rcToken holders of that Ruler Pair.
What is Credit Default Swap?
A Credit Default Swap is a form of insurance that compensates buyers in the event of a debt default. Lenders can buy Credit Default Swap in Cover Protocol.
What are the fees charged for borrowing?
There are 0.2% fees charged during the repayment of the loans and when lenders collect their payments.
How capital efficient is Ruler Protocol?
Like Cover Protocol, Ruler protocol will have to bootstrap every rcTokens/DAI pool for every series of loans it offers. Due to the isolated nature of those pools and the risk of collateral falling below mint ratio, the borrowing interest rate is high compared to fixed interest rate loans available at Aave.