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
_10graph TD_10 MOET[MOET<br/>Unit of Account]_10 MOET --> FLOW[FLOW = 1.0 MOET]_10 MOET --> USDC[USDC = 1.0 MOET]_10 MOET --> stFLOW[stFLOW = 1.05 MOET]_10 MOET --> Other[Other tokens...]_10_10 style MOET fill:#d94d4d,stroke:#333,stroke-width:4px,color:#fff
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:
_10Collateral: 1000 FLOW @ 1.0 MOET each × 0.8 factor = 800 MOET value_10Debt: 615.38 MOET_10Health Factor = 800 / 615.38 = 1.30_10_10Both collateral and debt in terms of MOET.
MOET in the Auto-Borrowing Flow
When you deposit collateral with auto-borrowing enabled, MOET is what you borrow:
_14sequenceDiagram_14 participant User_14 participant ALP_14 participant MOET_14_14 User->>ALP: Deposit 1000 FLOW_14 ALP->>ALP: Calculate: 1000 × 0.8 = 800 effective_14 ALP->>ALP: Target health: 1.3_14 ALP->>ALP: Can borrow: 800 / 1.3 = 615.38_14 ALP->>MOET: Auto-borrow 615.38 MOET_14 MOET->>User: Receive 615.38 MOET_14 ALP->>ALP: Health = 1.3 ✓_14_14 Note over User,MOET: All automatic, no manual steps!
Why MOET?
- Standardization: One primary asset simplifies everything
- Liquidity: MOET designed for high liquidity
- Predictability: You always know what you'll receive
- 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:
_10graph LR_10 A[Health > 1.5<br/>Too Safe] --> B[Calculate Excess]_10 B --> C[Auto-borrow MOET]_10 C --> D[Push to DrawDownSink]_10 D --> E[Health = 1.3 ✓]_10_10 style A fill:#4d994d,stroke:#333,stroke-width:2px,color:#fff_10 style E fill:#4d994d,stroke:#333,stroke-width:2px,color:#fff
Example:
_10State: $1000 effective collateral, $400 MOET debt_10Health: 1000 / 400 = 2.5 (way too high!)_10_10Action: Borrow 769.23 - 400 = 369.23 more MOET_10Result: $1000 / $769.23 = 1.3 (perfect!)
Undercollateralized: Repay MOET
When health drops below 1.1 (risky), ALP automatically repays MOET debt:
_10graph LR_10 A[Health < 1.1<br/>Risky!] --> B[Calculate Shortfall]_10 B --> C[Pull from TopUpSource]_10 C --> D[Repay MOET debt]_10 D --> E[Health = 1.3 ✓]_10_10 style A fill:#d94d4d,stroke:#333,stroke-width:2px,color:#fff_10 style E fill:#4d994d,stroke:#333,stroke-width:2px,color:#fff
Example:
_10State: $640 effective collateral (price dropped!), $615.38 MOET debt_10Health: 640 / 615.38 = 1.04 (danger zone!)_10_10Action: Repay 615.38 - 492.31 = 123.07 MOET_10Result: $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
_10graph LR_10 User[Deposit FLOW] --> ALP[ALP Position]_10 ALP --> Auto[Auto-borrow MOET]_10 Auto --> Wallet[Your Wallet]_10 Wallet --> Use[Use MOET<br/>Yield/Trading/etc]_10_10 style ALP fill:#4a7abf,stroke:#333,stroke-width:2px,color:#fff
Flow: Collateral → Borrow MOET → You control it
Pattern 2: FCM Integration (Full Automation)
Use case: Maximum automation with FYV
_15graph TB_15 User[Deposit FLOW] --> ALP[ALP Position]_15 ALP -->|Auto-borrow| MOET[MOET]_15 MOET -->|DrawDownSink| FYV[FYV Strategy]_15 FYV -->|Generate Yield| Yield[Yield Tokens]_15_15 Price[Price Drop] -.->|Triggers| Rebal[Rebalancing]_15 Rebal -->|Pull via TopUpSource| FYV_15 FYV -->|Provide MOET| ALP_15 ALP -->|Repay| MOET_15 ALP -->|Health Restored| Safe[Health = 1.3 ✓]_15_15 style ALP fill:#4a7abf,stroke:#333,stroke-width:3px,color:#fff_15 style FYV fill:#4d994d,stroke:#333,stroke-width:3px,color:#fff_15 style MOET fill:#d94d4d,stroke:#333,stroke-width:2px,color:#fff
Flow: Collateral → Auto-borrow MOET → FYV → Yield protects position!
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
_10graph LR_10 Collateral[FLOW Collateral] --> ALP[ALP Position]_10 ALP -->|Borrow| MOET[MOET]_10 MOET -->|Add Liquidity| LP[LP Pool<br/>MOET/FLOW]_10 LP -->|Earn| Fees[Trading Fees]_10_10 style LP fill:#4a7abf,stroke:#333,stroke-width:2px,color:#fff
Flow: Collateral → Borrow MOET → LP Pool → Earn trading fees
Pattern 4: Yield Arbitrage
Use case: Profit from rate differentials
_10graph LR_10 ALP[Borrow from ALP<br/>5% APY] -->|MOET| Protocol[Lend to Protocol<br/>8% APY]_10 Protocol -->|Earn| Spread[3% Spread<br/>Profit!]_10_10 style Spread fill:#4d994d,stroke:#333,stroke-width:2px,color:#fff
Flow: Borrow MOET cheap → Lend MOET expensive → Keep spread
MOET in Liquidations
Keeper Liquidations
Keepers repay MOET debt to seize collateral:
_12sequenceDiagram_12 participant Keeper_12 participant ALP_12 participant Position_12_12 Keeper->>Keeper: Detect HF < 1.0_12 Keeper->>ALP: Repay 100 MOET_12 ALP->>Position: Reduce debt by 100 MOET_12 ALP->>Keeper: Seize collateral + bonus_12 Position->>Position: Health = 1.05 ✓_12_12 Note over Keeper,Position: Keeper earns liquidation bonus
Protocol DEX Liquidations
Protocol swaps collateral to MOET automatically:
_10graph LR_10 A[Liquidatable Position] --> B[Seize FLOW Collateral]_10 B --> C[Swap FLOW → MOET<br/>via DEX]_10 C --> D[Repay MOET Debt]_10 D --> E[Health Restored]_10_10 style A fill:#d94d4d,stroke:#333,stroke-width:2px,color:#fff_10 style E fill:#4d994d,stroke:#333,stroke-width:2px,color:#fff
Example:
_10Position: 1000 FLOW, 650 MOET debt, HF = 0.98_10↓_10Seize: 150 FLOW_10↓_10Swap: 150 FLOW → 147 MOET (via DEX)_10↓_10Repay: 147 MOET debt_10↓_10Result: 850 FLOW, 503 MOET debt, HF = 1.05 ✓
MOET Economics
Supply & Demand
_20graph TB_20 subgraph Demand_20 D1[Users borrow for yield]_20 D2[Liquidators need MOET]_20 D3[Rebalancing operations]_20 D4[Protocol integrations]_20 end_20_20 subgraph Supply_20 S1[MOET deposits as collateral]_20 S2[Debt repayments]_20 S3[Interest payments]_20 S4[Protocol reserves]_20 end_20_20 Demand --> Market[MOET Market]_20 Supply --> Market_20 Market --> Rate[Interest Rates]_20_20 style Market fill:#d94d4d,stroke:#333,stroke-width:3px,color:#fff
Interest Rate Dynamics
_10Utilization = Total MOET Borrowed / Total MOET Available_10_10┌─────────────────┬──────────────────┬───────────────────┐_10│ Utilization │ Interest Rate │ Result │_10├─────────────────┼──────────────────┼───────────────────┤_10│ 0-80% (Low) │ 2-8% APY │ Cheap borrowing │_10│ 80-90% (Medium) │ 8-20% APY │ Balanced │_10│ 90-100% (High) │ 20-50%+ APY │ Discourages borrow│_10└─────────────────┴──────────────────┴───────────────────┘
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
- Designed for DeFi: Built specifically for Flow DeFi operations
- High Liquidity: Deep markets ensure efficient operations
- Composability: Works seamlessly with FYV and other protocols
- Predictability: Standard token across all FCM operations
- Efficiency: Single token simplifies everything
Best Practices
For Borrowers
When borrowing MOET, always maintain a buffer in your wallet for emergencies and set up a TopUpSource with sufficient MOET for automatic liquidation protection. Actively monitor MOET interest rates as they fluctuate with utilization, and diversify your yield strategies to spread risk across multiple opportunities. Avoid assuming MOET will always be cheap to borrow, concentrating all borrowed funds in one place, neglecting your TopUpSource balance, or forgetting that MOET debt continuously accumulates interest over time.
For Yield Seekers
For optimal yield generation, use the full FCM integration with ALP and FYV to enable complete automation. Allow MOET to flow automatically to FYV strategies and let the accumulated yield protect your position from liquidation. Monitor FYV's MOET liquidity to ensure adequate funds are available for rebalancing. Once you've enabled FYV integration, avoid manually managing MOET, interrupting the automated flow, or removing MOET from FYV when your position might need it for rebalancing.
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