> For the complete documentation index, see [llms.txt](https://huckleberry.gitbook.io/introduction/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://huckleberry.gitbook.io/introduction/huckleberry/thatchers-reservoir/risk-parameters.md).

# Risk Parameters

Underneath the hood

Thatcher's Reservoir uses standard risk parameters commonly used by other established lendin' protocols like Compound and Banker Joe.

### Collateral Factor

The collateral factor is the percentage of your collateral that can be borrowed against.

For example, if you deposit 1000 USDC.m, a collateral factor of 80% means you can borrow up to 800 USDC.m worth of assets.

### Liquidation

Seized collateral is liquidated at a 10% discount for all markets in order to incentivise liquidators. Of the 10%, the protocol takes a portion of liquidated tokens and donates it to Tom's House.

In other words, 2% of the 10% discount is given to Tom's House while 8% of the 10% discount is given to liquidators.

### Flash Loan

There are no flash loan fees associated with Thatcher's Reservoir.

### Reserve Factor

A share of the accrued borrowin' interest that is withheld by the protocol and donated to Tom's House. This portion is determined by the Thatcher's Reservoir's reserve factor.

<table><thead><tr><th width="150">Token</th><th width="150">Collateral</th><th>Collateral Factor</th><th>Reserve Factor</th></tr></thead><tbody><tr><td>MOVR</td><td>Eligible</td><td>60%</td><td>20%</td></tr><tr><td>BTC.m</td><td>Eligible</td><td>75%</td><td>20%</td></tr><tr><td>ETH.m</td><td>Eligible</td><td>75%</td><td>20%</td></tr><tr><td>USDC.m</td><td>Eligible</td><td>80%</td><td>20%</td></tr><tr><td>USDT.m</td><td>Eligible</td><td>80%</td><td>20%</td></tr><tr><td>USDC</td><td>Eligible</td><td>75%</td><td>20%</td></tr><tr><td>MIM</td><td>Eligible</td><td>75%</td><td>25%</td></tr><tr><td>DOT.m</td><td>Eligible</td><td>70%</td><td>25%</td></tr><tr><td>FRAX</td><td>Eligible</td><td>75%</td><td>25%</td></tr><tr><td>xcKSM</td><td>Eligible</td><td>70%</td><td>25%</td></tr><tr><td>TOM</td><td>Not Eligible</td><td>0%</td><td>25%</td></tr></tbody></table>