What does haircut mean?
A haircut is the difference between the market value of a collateral asset and the market value (purchase price) of the loan asset. Haircut is expressed in percentage terms.
Haircut is a mean by which markets impose margin on lending transactions to protect lender from possible borrower default. For example, a haircut of 20% implies that for $100 of provided collateral the borrower will only receive $80 worth of the loan.
How are exchange rates benchmarked within Nitrogen?
Oraclize, CryptoCompare, related liability limitations.
Where does Nitrogen get its price feed?
Nitrogen network retrieves market data for haircut calculations and post-trade management (default, margin call, repayment) from CryptoCompare by calling its API through Oraclize.it. Currently pricing rates within smart contracts are periodically updated through calls to the contracts from our backend.
In no event will Nitrogen be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of the CryptoCompare price feed.
How often does the Nitrogen "Mark-to-Market"?
The rates on all of the assets (both loan and collateral) listed on Nitrogen network are updated automatically every two hours and fetched via oraclize. These rates affect haircut levels of the borrower collateral and thus can be thought of as a mark to market procedure.