FAQ

Why Algorand?

Algorand is a permissionless, pure proof-of-stake blockchain that offers speed and stable transaction costs compared with other blockchains. Low fees directly reflect in a higher yield for depositors, since they can re-invest profits with high frequency, without having to consider the impact of the fees.

Algorand, thanks to the PPoS, solved the so-called “blockchain trilemma” in which there are three key objectives – security, scalability, and decentralization – Before Algorand, blockchains had to sacrifice at least one of these key objectives for the sake of the other two.

Why is the page not loading correctly?

There could be several reasons why this may happen. One thing that may help is to change your connection to the blockchain. This can easily be done via the settings menu in the top right, select node, and then the available alternative node. If the problem is not resolved you can contact Folks Finance support via the available channels.

Learn more about node types here.

What is an escrow account?

An Escrow Account is an account that will hold the collateral of your loan until a withdrawal operation occurs.

What is the Liquidation Margin?

Due to market volatility, your collateral values may change. The Liquidation Margin helps you to control your loan position status and avoid liquidations. It varies between 0-100% and the closer the value is to zero the closer the liquidation. When the liquidation margin is negative, your loan can be liquidated.

What is an Opt-In operation?

All of the tokens supported by the Folks Finance protocol are ASAs (Algorand Standard Assets). Thus, the opt-in operation is required before utilization of them. The Opt-in procedure has to be performed once per token if the asset has not previously been held in the wallet. However, the Folks Finance web app will warn users if the opt-in procedure has not been performed, and support them through the opt-in process. Once all the requirements are fulfilled, you are ready to interact with the protocol.

Does the asset opt-in cost money?

Yes, the opt-in has a small cost for the Algorand network fee of 0.001 ALGO. In addition, you will also need to keep an extra 0.1 ALGO in your wallet for the minimum balance requirement of being opted-in.

What’s the difference between V1 and V2?

V2, what's new?

How do I migrate my assets from V1 to V2?

Moving your assets from V1 to V2 will require withdrawing the assets from V1, then depositing them into V2. If you have positions open on Folks Finance V1, you will need to close them before being able to move the collateral.

Why are rewards lower on V1?

Folks Finance rewards programs are being migrated to V2. In order to take advantage of these systems, a transition to V2 is encouraged.

How are interest rates set?

You can find information about how interest rates are calculated on the Interest Rate Model page of the docs.

Is Folks Finance V2 audited?

Folks Finance V2 has been audited by three separate firms specializing in web3: Trail of Bits, Vantage Point, and CertiK. Find the audit reports here.

Can Folks Finance access my funds?

No. Folks Finance uses non-custodial smart contracts which ensure that only the wallet which deposited funds can remove them.

Is there a grace period when my loan becomes undercollateralized?

Due to the nature of DeFi, there is no grace period when your loan becomes undercollateralized. If your liquidation margin reaches zero, a liquidator can liquidate your collateral.

What happens to my collateral when I get liquidated?

A liquidator can purchase some of your collateral in order to keep the protocol’s reserves whole. In return, the liquidator earns off arbitrage between the price they purchased the collateral and the price they sold it.

Does Folks Finance have a token?

The FOLKS token is being planned to release in 2025, but there is no specific date chosen. Be careful of impersonations, and stay tuned to our social channels for official information.

Why is Folks Finance showing a lower ALGO amount than my wallet?

Your displayed ALGO balance is the amount of ALGO in your wallet, subtracted by the minimum balance requirement and 1 ALGO for fees.

Why is the stable rate higher than the variable rate?

The difference between stable and variable rates lies in how they are calculated. In fact, while variable rates fluctuate based on market dynamics, stable rates take into account potential fluctuations in the utilization rates of listed assets, ensuring that the user pays a stable amount of interest over time. For more information on how interest rates are calculated, see the interest rate model page of the docs.

Why do the Liquidation Margin and LTV change with the collateral swap?

The liquidation margin may decrease for a number of reasons:

1. The asset you are swapping into has a lower collateral factor than the asset you are swapping from.

2. The price impact of the swap can result in you receiving less in value than what you sent.

3. The slippage excess from the swap is not re-added as collateral but remains in your wallet.