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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).

What is MOET?​

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​

FeatureMOETFLOWUSDC
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:

Next Steps​

Key Takeaway

MOET isn't just another token - it's the backbone of FCM. It standardizes pricing, enables automation, and makes yield-powered liquidation prevention possible. Think of it as the "blood" flowing through FCM's veins, carrying value between ALP and FYV.

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