MOET's Role in ALP

MOET plays a central role in ALP as the default token and primary unit of account. Understanding MOET's function is essential for effectively using ALP and Flow Credit Market (FCM). It standardizes pricing, enables automation, and makes yield-powered liquidation prevention possible.

MOET is a fungible token on Flow that serves as:

• 💰 The primary borrowed asset - What you borrow from ALP
• 📊 The unit of account - All prices quoted in MOET terms
• 🔄 The rebalancing medium - Used for all automated operations
• 🌉 The value bridge - Flows between ALP and FYV

For more about MOET tokenomics, see the MOET documentation.

MOET as Unit of Account

Think of MOET as the "common language" for all value in ALP - like how everything in a store is priced in dollars.

All Prices in MOET Terms

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graph TD

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MOET[MOET<br/>Unit of Account]

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MOET --> FLOW[FLOW = 1.0 MOET]

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MOET --> USDC[USDC = 1.0 MOET]

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MOET --> stFLOW[stFLOW = 1.05 MOET]

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MOET --> Other[Other tokens...]

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style MOET fill:#fbb,stroke:#333,stroke-width:4px

Why this matters: Using MOET as the unit of account simplifies calculations by expressing all values in one currency, standardizes pricing consistently across all tokens, enables multi-collateral positions by making it easy to compare different assets, and provides unified risk management through a single health metric.

Health factor calculation example:

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Collateral: 1000 FLOW @ 1.0 MOET each × 0.8 factor = 800 MOET value

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Debt: 615.38 MOET

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Health Factor = 800 / 615.38 = 1.30

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All in MOET terms = Simple and consistent!

Why Not Just Use USD?

MOET is designed specifically for Flow DeFi, ensuring deep on-chain liquidity, native protocol integration, optimized performance for Flow operations, and better composability with FYV and other protocols.

MOET in the Auto-Borrowing Flow

When you deposit collateral with auto-borrowing enabled, MOET is what you borrow:

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sequenceDiagram

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participant User

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participant ALP

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participant MOET

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User->>ALP: Deposit 1000 FLOW

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ALP->>ALP: Calculate: 1000 × 0.8 = 800 effective

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ALP->>ALP: Target health: 1.3

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ALP->>ALP: Can borrow: 800 / 1.3 = 615.38

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ALP->>MOET: Auto-borrow 615.38 MOET

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MOET->>User: Receive 615.38 MOET

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ALP->>ALP: Health = 1.3 ✓

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Note over User,MOET: All automatic, no manual steps!

Why MOET?

1. Standardization: One primary asset simplifies everything
2. Liquidity: MOET designed for high liquidity
3. Predictability: You always know what you'll receive
4. Efficiency: No token choice complexity

MOET in Rebalancing

Overcollateralized: Borrow More MOET

When health rises above 1.5 (too safe), ALP automatically borrows more MOET:

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graph LR

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A[Health > 1.5<br/>Too Safe] --> B[Calculate Excess]

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B --> C[Auto-borrow MOET]

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C --> D[Push to DrawDownSink]

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D --> E[Health = 1.3 ✓]

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style A fill:#bfb

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style E fill:#bfb

Example:

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State: $1000 effective collateral, $400 MOET debt

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Health: 1000 / 400 = 2.5 (way too high!)

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Action: Borrow 769.23 - 400 = 369.23 more MOET

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Result: $1000 / $769.23 = 1.3 (perfect!)

Undercollateralized: Repay MOET

When health drops below 1.1 (risky), ALP automatically repays MOET debt:

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graph LR

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A[Health < 1.1<br/>Risky!] --> B[Calculate Shortfall]

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B --> C[Pull from TopUpSource]

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C --> D[Repay MOET debt]

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D --> E[Health = 1.3 ✓]

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style A fill:#fbb

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style E fill:#bfb

Example:

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State: $640 effective collateral (price dropped!), $615.38 MOET debt

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Health: 640 / 615.38 = 1.04 (danger zone!)

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Action: Repay 615.38 - 492.31 = 123.07 MOET

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Result: $640 / $492.31 = 1.3 (safe again!)

Math reference: See FCM Mathematical Foundations for auto-borrowing formulas and Rebalancing Mathematics for rebalancing calculations.

MOET Flow Patterns

Pattern 1: Simple Borrowing

Use case: Borrow MOET, use it yourself

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graph LR

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User[Deposit FLOW] --> ALP[ALP Position]

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ALP --> Auto[Auto-borrow MOET]

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Auto --> Wallet[Your Wallet]

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Wallet --> Use[Use MOET<br/>Yield/Trading/etc]

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style ALP fill:#f9f,stroke:#333,stroke-width:2px

Flow: Collateral → Borrow MOET → You control it

Pattern 2: FCM Integration (Full Automation)

Use case: Maximum automation with FYV

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graph TB

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User[Deposit FLOW] --> ALP[ALP Position]

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ALP -->|Auto-borrow| MOET[MOET]

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MOET -->|DrawDownSink| FYV[FYV Strategy]

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FYV -->|Generate Yield| Yield[Yield Tokens]

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Price[Price Drop] -.->|Triggers| Rebal[Rebalancing]

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Rebal -->|Pull via TopUpSource| FYV

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FYV -->|Provide MOET| ALP

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ALP -->|Repay| MOET

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ALP -->|Health Restored| Safe[Health = 1.3 ✓]

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style ALP fill:#f9f,stroke:#333,stroke-width:3px

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style FYV fill:#bfb,stroke:#333,stroke-width:3px

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style MOET fill:#fbb,stroke:#333,stroke-width:2px

Flow: Collateral → Auto-borrow MOET → FYV → Yield protects position!

FCM's Innovation

This is why FCM is unique: Your MOET earnings from FYV automatically repay debt when needed. Yield-powered liquidation prevention!

Learn more: FCM Basics

Pattern 3: Liquidity Provision

Use case: Earn trading fees with borrowed MOET

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graph LR

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Collateral[FLOW Collateral] --> ALP[ALP Position]

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ALP -->|Borrow| MOET[MOET]

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MOET -->|Add Liquidity| LP[LP Pool<br/>MOET/FLOW]

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LP -->|Earn| Fees[Trading Fees]

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style LP fill:#bbf,stroke:#333,stroke-width:2px

Flow: Collateral → Borrow MOET → LP Pool → Earn trading fees

Pattern 4: Yield Arbitrage

Use case: Profit from rate differentials

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graph LR

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ALP[Borrow from ALP<br/>5% APY] -->|MOET| Protocol[Lend to Protocol<br/>8% APY]

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Protocol -->|Earn| Spread[3% Spread<br/>Profit!]

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style Spread fill:#bfb,stroke:#333,stroke-width:2px

Flow: Borrow MOET cheap → Lend MOET expensive → Keep spread

MOET in Liquidations

Keeper Liquidations

Keepers repay MOET debt to seize collateral:

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sequenceDiagram

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participant Keeper

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participant ALP

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participant Position

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Keeper->>Keeper: Detect HF < 1.0

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Keeper->>ALP: Repay 100 MOET

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ALP->>Position: Reduce debt by 100 MOET

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ALP->>Keeper: Seize collateral + bonus

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Position->>Position: Health = 1.05 ✓

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Note over Keeper,Position: Keeper earns liquidation bonus

Protocol DEX Liquidations

Protocol swaps collateral to MOET automatically:

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graph LR

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A[Liquidatable Position] --> B[Seize FLOW Collateral]

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B --> C[Swap FLOW → MOET<br/>via DEX]

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C --> D[Repay MOET Debt]

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D --> E[Health Restored]

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style A fill:#fbb

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style E fill:#bfb

Example:

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Position: 1000 FLOW, 650 MOET debt, HF = 0.98

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↓

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Seize: 150 FLOW

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↓

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Swap: 150 FLOW → 147 MOET (via DEX)

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↓

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Repay: 147 MOET debt

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↓

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Result: 850 FLOW, 503 MOET debt, HF = 1.05 ✓

MOET Economics

Supply & Demand

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graph TB

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subgraph Demand

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D1[Users borrow for yield]

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D2[Liquidators need MOET]

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D3[Rebalancing operations]

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D4[Protocol integrations]

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end

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subgraph Supply

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S1[MOET deposits as collateral]

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S2[Debt repayments]

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S3[Interest payments]

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S4[Protocol reserves]

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end

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Demand --> Market[MOET Market]

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Supply --> Market

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Market --> Rate[Interest Rates]

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style Market fill:#fbb,stroke:#333,stroke-width:3px

Interest Rate Dynamics

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Utilization = Total MOET Borrowed / Total MOET Available

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┌─────────────────┬──────────────────┬───────────────────┐

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│ Utilization │ Interest Rate │ Result │

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├─────────────────┼──────────────────┼───────────────────┤

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│ 0-80% (Low) │ 2-8% APY │ Cheap borrowing │

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│ 80-90% (Medium) │ 8-20% APY │ Balanced │

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│ 90-100% (High) │ 20-50%+ APY │ Discourages borrow│

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└─────────────────┴──────────────────┴───────────────────┘

Why it matters: Low utilization makes MOET cheap to borrow, while high utilization makes borrowing expensive and encourages repayment. This dynamic allows the system to self-balance supply and demand.

Why MOET vs Other Tokens?

Comparison Table

Feature	MOET	FLOW	USDC
Primary borrowed asset	✅ Yes	⚠️ Possible	⚠️ Possible
Unit of account	✅ Yes	❌ No	❌ No
Auto-borrow default	✅ Yes	❌ No	❌ No
Rebalancing token	✅ Yes	❌ No	❌ No
FCM integration	✅ Deep	⚠️ Moderate	⚠️ Moderate
FYV integration	✅ Native	⚠️ Limited	⚠️ Limited

MOET Advantages

1. Designed for DeFi: Built specifically for Flow DeFi operations
2. High Liquidity: Deep markets ensure efficient operations
3. Composability: Works seamlessly with FYV and other protocols
4. Predictability: Standard token across all FCM operations
5. Efficiency: Single token simplifies everything

Can I Use Other Tokens?

Yes, but with limitations:

For Developers

You can manually borrow other tokens:

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// Borrow FLOW instead of MOET

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let flowBorrowed <- position.borrow(

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type: Type<@FlowToken.Vault>(),

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amount: 100.0

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)

However:

• Auto-borrowing always uses MOET
• Rebalancing always uses MOET
• Health calculations still in MOET terms
• FYV integration requires MOET

Best Practices

For Borrowers

✅ Do:

• Maintain MOET buffer in wallet for emergencies
• Set up TopUpSource with MOET for auto-protection
• Monitor MOET interest rates
• Diversify yield strategies with borrowed MOET

❌ Don't:

• Assume MOET will always be cheap to borrow
• Put all borrowed MOET in one place
• Ignore MOET balance in TopUpSource
• Forget MOET debt accumulates interest

For Yield Seekers

✅ Do:

• Use full FCM integration (ALP + FYV)
• Let MOET flow automatically to FYV
• Let yield protect your position
• Monitor FYV MOET liquidity

❌ Don't:

• Manually manage MOET if using FYV
• Interrupt the automated flow
• Remove MOET from FYV when position needs it

Real-World Example

Complete MOET Lifecycle

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graph TB

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Start[User deposits<br/>1000 FLOW] --> Calc[ALP calculates:<br/>Can borrow 615 MOET]

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Calc --> Borrow[Auto-borrow<br/>615 MOET]

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Borrow --> Deploy[MOET → FYV<br/>via DrawDownSink]

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Deploy --> Earn[FYV generates<br/>yield in MOET]

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Price[FLOW price<br/>drops 20%] -.-> Detect[ALP detects<br/>HF = 1.04]

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Detect --> Need[Need 123 MOET<br/>to rebalance]

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Need --> Pull[Pull from FYV<br/>via TopUpSource]

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Pull --> Repay[Repay 123 MOET]

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Repay --> Safe[Health = 1.3 ✓<br/>Liquidation avoided]

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style Start fill:#bbf

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style Earn fill:#bfb

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style Price fill:#fbb

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style Safe fill:#bfb

What happened:

1. Deposited FLOW → Auto-borrowed 615 MOET
2. MOET deployed to FYV → Earned yield
3. Price dropped → Position at risk
4. FYV provided 123 MOET → Debt repaid
5. Result: Your MOET yield prevented liquidation!

Summary

MOET's Three Roles:

1. 💰 Borrowed Asset: What you borrow from ALP
2. 📊 Unit of Account: How all prices are quoted
3. 🔄 Rebalancing Medium: Flows between ALP and FYV

Key Points:

• All auto-borrowing is in MOET
• All rebalancing uses MOET
• All health calculations in MOET terms
• MOET enables FCM's yield-powered liquidation prevention

Why MOET Matters: Without MOET as the standard, FCM's automation wouldn't work. MOET is the "common currency" that lets ALP and FYV communicate seamlessly, enabling the unique liquidation prevention mechanism.

Mathematical Foundation

MOET is central to all FCM calculations:

• Unit of Account: All prices quoted in MOET terms - Price Oracle
• Auto-Borrowing: MOET amounts calculated from collateral - Auto-Borrowing Math
• Rebalancing: MOET flows restore health factor - Rebalancing Math
• Health Factor: All calculations in MOET terms - Health Factor Formula

Next Steps

• Understand automation: Rebalancing Mechanics
• See the big picture: FCM Architecture
• Deep dive on MOET: MOET Documentation
• Explore position management: Position Lifecycle