Protocol Simulator

Why did we build a Protocol Simulator?

Building a protocol simulator became a necessity for Zharta to allows us to understand what the ideal underwriting conditions for our loans would be, in a scientific manner. This simulator makes use of a large set of historical data (see Data) to model and simulate different probabilistic scenarios, which we then use to test out different underwriting policies, measuring their impact on the performance of the pools.

Example of protocol simulator test output


Setting APR for each supported collection using interest rate market analysis, considering different maturities and LTV levels.

Setting LTV cap for each supported collection by calculating return-on-investment (ROI) for each LTV range, identifying loss-making levels and setting maximum caps.

We are constantly testing our models against market conditions in order to establish healthy parameters for our protocol. Our focus is to keep refining our models and analysis so they can be used as benchmarks in the space.


The architecture of our simulator is described in the figure below.

Components and Implementations

Last updated