🧹 Demex Cleans House

Demex has implemented changes to its borrow interest mechanism as part of pool normalization efforts. **Key Changes:** - In borrow-only mode, all interest now flows to fee collectors (stakers and LPs) rather than lenders - This strategic shift aims to discourage users from parking funds in pools solely to farm interest during the unwinding process - The platform previously reverted zero-interest curves and introduced return-only mode for all assets The adjustment represents a tactical approach to rebalancing the protocol's liquidity structure while maintaining incentives for active participants in the ecosystem.

Demex is reverting its zero-interest curve back to previous settings and implementing a return-only mode across all assets. This follows a temporary measure where interest rates were set to 0% as a safety precaution. The zero-interest setting was designed to halt interest dynamics that were creating excessive debt positions while the team adjusted parameters and addressed bad debt. The return-only mode represents a new operational framework for asset management on the platform. Users should expect changes to how interest accrues and how positions can be managed going forward. These adjustments are part of ongoing efforts to stabilize the platform's lending mechanics and protect users from parameter-related risks.

Demex is rolling back excess interest charges on accounts with bad debt following a period of elevated interest rates. **What happened:** - Higher interest rates over the past month caused unhealthy positions to accumulate debt faster than intended - The platform is reversing extra interest specifically for accounts with zero collateral - These positions cannot be liquidated due to lack of collateral **Temporary measures:** - Interest rates have been temporarily set to 0% - This safety measure prevents unreasonable debt accumulation while the team adjusts parameters - The platform is working to repay positions affected by bad debt The adjustments aim to stabilize the lending market and address edge cases where debt grew disproportionately.

**Demex is taking action to resolve lending issues by repaying outstanding bad debts.** The team announced they will use their own funds to repay and close positions with bad debt, ensuring no lending positions remain stuck. This follows a previous measure where they rolled back extra interest that accumulated on bad debt accounts. **Key points:** - Team will cover all bad debt positions using personal funds - Ensures all lending positions can be properly closed - Addresses issue where higher interest rates caused unhealthy positions to grow faster - Extra interest reversed for accounts with zero collateral that couldn't be liquidated The move demonstrates the team's commitment to maintaining platform integrity and protecting users from systemic lending issues.

Demex is implementing changes to Nitron asset parameters to keep withdrawals operational and facilitate position unwinding. **Key Updates:** - Parameter adjustments scheduled to maintain platform stability - Changes follow previous modifications made in August 2025 - Earlier update postponed liquidation parameter changes due to numerous at-risk accounts The platform previously adjusted nLEND pricing and liquidation thresholds to ensure fair-value liquidations, with the team covering any resulting bad debt. These ongoing parameter updates demonstrate Demex's commitment to managing risk while preserving user access to funds during market adjustments.