DBR - DOLA Borrowing Rights
DBR is an ERC20 token that represents your right to borrow DOLA in FiRM. A user with a single DBR has the right to borrow one DOLA stablecoin for up to one year with no interest.
The duration is not fixed so you can borrow two DOLA for six months, four DOLA for three months, and so on. Borrowing one DOLA for one year will gradually consume that DBR token.
If a user’s DBR balance turns negative while borrowing DOLA, additional DBR’s are added by any 3rd party for a fee to the user’s wallet to maintain a positive DBR balance. The cost of additional DBR’s during Recharge is paid by adding DOLA debt to the user’s loan balance. DBR’s purchased via Recharge is priced at a substantial premium to market DBR pricing to incentivize responsible loan management and to avoid having to rely on oracle infrastructure.
The Recharge feature can be repeated if the borrower fails to top-up their DBR balance or repay their loan, until the borrower’s DOLA loan balance reaches the maximum collateral factor for the loan, triggering a liquidation process.
The liquidation process follows common DeFi liquidation practices where a fee (e.g., 10%) is collected by third-party liquidators who successfully repay loans that have become eligible for liquidation due to a breach of a borrower’s collateral factor. An additional liquidation fee may also be charged by the Inverse Finance DAO treasury. Inverse Finance DAO reserves the rights to alter the current liquidation process in future updates to the FiRM protocol. Any modifications would require a DAO vote via on-chain governance.
Read more about the utility of FiRM, DBR and DOLA on the next page and here: