FAQs

How does PHT maintain its PHP peg?

PHT maintains its PHP peg through a combination of overcollateralization, dynamic stability fees, and liquidation mechanisms that work together to ensure the peg remains stable.

What happens during liquidation?

When the collateral falls below a required threshold, the protocol triggers liquidation. Collateral is then auctioned through a Dutch auction mechanism to repay the outstanding debt along with any applicable penalties.

How secure is the protocol?

Security is a top priority. PHT incorporates multiple layers of protection including formal verification, regular security audits by reputable firms, and time-delayed oracles to safeguard against market manipulation and vulnerabilities.

What are the costs of minting PHT directly?

Users may incur network transaction fees, stability fees on borrowed PHT, and potential liquidation penalties if the collateralization ratio falls below the required level.

What types of collateral are accepted?

The protocol supports a range of digital assets as collateral. Accepted collateral includes established cryptocurrencies, stablecoins (USDT and USDC), and select tokenized assets that meet our quality and liquidity criteria.

How does the dynamic stability fee work?

The dynamic stability fee adjusts based on real-time market conditions and the overall health of the protocol. This mechanism incentivizes maintaining proper collateral ratios and helps ensure that the PHP peg remains stable.

What happens if my collateral value drops below the required threshold?

If your collateral value drops below the required ratio, the protocol will initiate a liquidation process to safeguard the system’s stability. This involves auctioning off collateral via a Dutch auction to cover the debt and any incurred penalties.

Can I retrieve my collateral after repaying my debt?

Yes, once you have repaid your outstanding debt—including any applicable stability fees and penalties—you can withdraw your collateral from the system.

How frequently are the protocol’s smart contracts audited?

To maintain a high level of security, the protocol undergoes regular audits by independent, reputable security firms. Additionally, formal verification is employed to ensure the integrity of the smart contracts.

What is the role of time-delayed oracles in the protocol?

Time-delayed oracles provide price feeds with a built-in delay to help mitigate the risk of rapid price manipulation. This delay ensures that the protocol receives more stable and reliable market data for making informed decisions.

Are there any risks associated with using the protocol?

While every effort is made to secure the protocol, users should be aware that all digital asset protocols carry inherent risks, such as market volatility and smart contract vulnerabilities. It is important to understand these risks and manage collateral accordingly.

How do network transaction fees affect my transactions?

Network transaction fees are determined by the underlying blockchain network and can vary depending on network congestion. These fees are a standard part of blockchain transactions and are separate from any fees charged by the protocol.