Automatic Coin Exchange Triggered by Personal Over-Borrowing

1. When a single user’s borrowing amount exceeds 90% of their personal borrowing limit, the system will send an early warning to the user, prompting them to repay the debt proactively.
2. When a single user’s borrowing amount exceeds 100% of their personal borrowing limit, the personal automatic coin exchange mechanism is triggered, following this process:
   1. The system will cancel the user’s spot/spot margin sell orders for the borrowed currency to release frozen balances.
   2. The system will automatically convert the positive assets in the user’s account into the over-borrowed currency for repayment, prioritizing assets by currency liquidity (from highest to lowest). During this process, sell orders for the positive assets will be canceled, and redemption of cash fund shares associated with the positive assets may be involved.
   3. Once the borrowed amount is detected to be less than or equal to 85% of the personal borrowing limit during the above process, the automatic coin exchange process will be terminated.

Automatic Coin Exchange Triggered by Fund Pool Over-Borrowing

1. When the utilization rate of a given currency’s fund pool reaches the automatic repayment early warning threshold, the system will send an early warning to all users with liabilities in that currency, prompting them to repay the debt proactively.
2. When the utilization rate of a given currency’s fund pool reaches the automatic repayment ratio, the platform’s automatic coin exchange mechanism is triggered, following this process:
   1. All borrowing activities for the over-borrowed currency are prohibited, including borrowing for order placement and borrowing for fund transfer. At the same time, all spot/spot margin sell orders of users with borrowing in this currency are canceled to release funds.
   2. Users are sorted and classified by the amount of their liabilities in the currency (from the highest liability to the lowest). Only one liability tier of users is processed per round:
      • The user’s required repayment amount for the currency = Total liability amount - Lower limit of the liability tier. In other words, after each repayment, the user’s liability tier will be reduced by one level.
      • The system will automatically convert the positive assets in the user’s account into the over-borrowed currency for repayment, prioritizing assets by currency liquidity (from highest to lowest). During this process, sell orders for the positive assets will be canceled, and redemption of cash fund shares associated with the positive assets may be involved.
      • When the user’s repayment amount for the current round is sufficient, the user’s account will exit the process, and the system will proceed to process the next user.
   3. Once the utilization rate of the currency’s fund pool is detected to reach the safety threshold during the above process, the platform-wide automatic coin exchange process for that currency will be stopped. If the safety threshold is still not reached after all users in the current tier have repaid, the system will process users in the next (lower) liability tier until the fund pool utilization rate meets the safety threshold.

Notes

1. Example of user liability tier classification (taking ETH as an example):