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The Fields of Mars

Summary

In the Fields of Mars, users are able to interact with very specialized smart contracts that exist outside of and separate from the Red Bank. However, they’re pre-authorized to borrow from the Red Bank without posting collateral. This type of borrowing is known as Contract-to-Contract (C2C) borrowing. It enables applications or apps to be built on top of the Red Bank for specific purposes. The first such use-case for C2B borrowing is leveraged yield farming.

Contract-to-Contract Borrowing in the Fields of Mars

Traditional credit protocols offer relatively low interest rates to users. This is because they offer only collateralized loans which are capital-inefficient (low LTVs) and target a small market since they rely on lenders who also want to borrow.
The Fields of Mars solves this by allowing the protocol to tap into a completely new source of borrowing demand: non-depositor borrowers. Known as Contract-to-Contract (C2C) borrowing, this is expected to generate higher borrow demand and utilization rates and therefore higher yields for Mars lenders.
The first project that is using this facility is Mars itself. The C2C autonomous credit line is used within Mars to offer users access to leveraged yield-farming strategies in the Fields of Mars. These strategies allow users to do one-click farming with auto-compounding, and the option of adding UST leverage on top.
C2C strategies themselves are collateralized; Mars simply needs to trust the smart contract and liquidation logic in order to safely extend credit.
The following diagram shows at a high level how deposits work with the MIR-UST strategy, resulting in an effective 2x leverage ratio for the user.
This allows the user to farm with leverage with increased yield (in the form of MIR tokens issued as staking rewards), but there is a liquidation risk should the value of MIR drop. This process is shown step-by-step below.
Scenario 1: Value of LP asset remains constant or increases
Scenario 2: Value of LP asset decreases resulting in liquidation
Alpha-style leveraged yield farming, as shown above, is merely the first C2C application built, but one can also imagine levered Yearn-style vault strategies. An example would be a bLUNA / ANC farming strategy.

Liquidation

Smart contracts that wish to utilize C2C borrowing must have liquidation logic implemented that ensures their ability to repay regardless of market conditions. Developers are free to choose their preferred liquidation logic, but these must be approved by the Martian Council in order for a C2C credit line to be extended.
As an example of how liquidation logic might work, we will explore the MIR-UST leveraged yield farming strategy above. In this case, a user’s asset is in the form of staked MIR-UST LP tokens. If the value of these LP tokens falls below the liquidation threshold, defined as a percentage of the user’s debt, anyone can close the position. The assets are removed from the liquidity pool, and the UST portion immediately used to pay back the debt. An appropriate amount of MIR is sold for UST to cover any outstanding debt. Among the remaining assets, a portion is awarded to the liquidator, and the rest is refunded to the user.
For more examples of leveraged yield farming as well as a list of the specific launch parameters in the Fields of Mars please see Launch Parameters for the Fields of Mars.

Fields of Mars FAQs

1. What is leveraged yield farming?

Yield farming refers to the process of locking up crypto assets in protocols in exchange for fees or governance tokens. With leveraged yield farmers, users borrow assets to "leverage" or increase the numbers of tokens they are using in their yield farms.

are my tokens in the Fields of Mars?

Mars has been audited. However, the technology powering the protocol is highly experimental and risky. You should actively manage your positions in the Fields of Mars to minimize the risk of liquidation. Read the Mars Disclaimers for more information on the risks involved.

Fields of Mars Terminology

Name
Description
APY
Annual percentage yield (all APYs are estimates)
Borrowing Capacity
The total amount you can borrow as expressed by a percentage. If you hit 100% of your borrowing capacity you are at risk of immediate liquidation
Borrowing Limit
The maximum amount you can borrow relative to your deposit at the time you initiate your position. The limit varies based on the assets you have deposited and borrowed, but it is always lower than your liquidation threshold to provide cushion in case of market volatility
Liquidation Threshold
The level at which your farm becomes eligible for liquidation. You should keep a comfortable cushion below this level to minimize liquidation risk
Leverage
Your leverage ratio. On Mars this is currently expressed as a multiple of your deposit. For example, if you deposit $100 and borrow $100, you have a leverage ratio of 2x
Liquidation Price
If your primary asset falls below this price you are in immediate danger of liquidation
LTV
Loan-to-value ratio. If your LTV hits 100%, you are in danger of being liquidated
PNL
Profit and loss
Position
An active yield farming strategy
Strategies
Specific leveraged yield farming tactics that you can use in the Fields of Mars. Strategies are generally specific to one specific yield farming opportunity (i.e. ANC)
Supply
Assets that users deposit into the Fields of Mars smart contracts. At a minimum, the user must supply the primary asset (ANC, LUNA, MIR, etc.). Then, the strategy will borrow UST
Unrealized PNL
Profits or losses on open positions. Close all or part of your position to "realize" or capture your gains or losses
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On this page
Summary
Contract-to-Contract Borrowing in the Fields of Mars
Liquidation
Fields of Mars FAQs
1. What is leveraged yield farming?
are my tokens in the Fields of Mars?
Fields of Mars Terminology