Maths for position safety

This section explains how the Fathom's FXD stablecoin position's safety is calculated.

For a position to be considered safe, below should hold true.

$$lockedCollateralAmount * PriceWithSafetyMargin > DebtShare * debtAccumulateRate,$$

where

$$Price WithSafetyMargin = RawPrice * LTV$$

When RawPrice is the price of collateral from PriceFeed and LTV is Loan To Ratio.

In other words

$$lockedCollateralVaule > debtVault$$

$$debtVault = debtShare * debtAccumulateRate$$

And debtAccumulatedRate is calculated as

$$debtAccumulatedRate = (1 + interestRate)^{1 / 31,536,000}$$

since debtAccumulatedRate is a second pounding interestRate.

Position safety calculation model

Please refer to below position safety calculation model.

https://docs.google.com/spreadsheets/d/1--XSZWeKq2HudwH6Btlg8hSpUuEOFStGYXXUDoOW7Es/edit?usp=sharing