> For the complete documentation index, see [llms.txt](https://source-code-systems.gitbook.io/better-bank/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://source-code-systems.gitbook.io/better-bank/protocol-mechanics/the-wildlands.md).

# The Wildlands

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**Risk & Wallet Separation - Don't combine Stronghold and Wildlands Positions on the same Wallet**

* **The Wildlands is volatile**—positions can be liquidated quickly even if managed properly.
* **Do NOT mix Stronghold and Wildlands positions in the same wallet**.
  * If liquidation occurs, **50% of all assets in that wallet (including Stronghold deposits) are captured upon liquidation**.
  * **BetterBank strongly recommends keeping separate wallets** for each strategy, even if just using multiple Wildlands strategies, because some strategies are more volatile than others.
  * **If you combine Stronghold and Wildlands assets in one wallet, you assume full risk.**
    {% endhint %}

The **Wildlands** is BetterBank’s **dynamic credit environment**, designed to **replace traditional fractional reserve banking** with a fully **on-chain, collateral-backed system**. Unlike the Stronghold, which focuses on passive interest-bearing deposits, the Wildlands enables users to earn **synthetic credit (Favor Token types),** through the groves where Esteem is staked, and use them in **deep, liquid LP pairs** as collateral to borrow against. The borrowed assets don't require repayment, as a liquidation would take care of that. This means that the Wildlands is a source of immediately usable passive income.

E**ach Favor type is specific to its underlying asset**, such as **PLSF** (Favor paired to PLS) and **PLSXF** (Favor paired to PLSX). These tokens are paired only with their native assets (e.g., PLS–PLSF) in liquidity pools and used as **collateral for borrowing**.

**How the Wildlands Works**

* **Users earn** multiple types of **Favor tokens** by **staking Esteem** in the respective **Wildlands Groves**.
  * Each grove emits corresponding Favor Type
    * **PDAIF, PLSF, and PLSXF** Groves 
* Each **Grove** **emits** an amount of **Favor** each day equaling a **percentage** of the current **supply** **of** that **Favor** token. The **percentage equals** the **ratio** **to** its **paired asset** in percentages, **up to 3%**. For example, **if PLSF** (Pulse Favor) is worth **2.56 PLS, then** that day the **PLSF** Grove **prints 2.56%** of total **PLSF supply** **to** all **stakers of Esteem** in that Grove. 
* Favor types are then **paired with their respective paired assets (i.e. pDAI, PULSE)** to create LP tokens (e.g., pDAI–PDAIF LP). Primarily this happens through an automated flash-loan action when posting the Favor as collateral.
* These LP tokens act as **collateral to borrow from the Stronghold**.
  * **Borrow against** the value of your \[Favor-asset] **LP position**, **up to** a the **LTV** threshold.
  * **Borrowing** is the **optimal strategy** versus selling as **it yields** more **assets in-hand** than selling at the 50% tax rate. This sustains the Favor prices
  * **Only when borrowing** of assets **is disabled** **because of** a **lack** of available assets, is **selling** of Favor **warranted** as a back-up option to **profit** on it. Since the **sell tax** **strengthens** the **treasury** **and** the treasury instantly **deposits**, **the selling** of Favor immediately **results** in **increased asset availability**.

**Establishing a Wildlands Position**

Users can create a Wildlands position in two ways:

1. **Wildlands Flash-in** – Automatically forms the Favor LP using a **flash loan**, then deposits the LP as collateral. The result:
   * A **50% Loan-to-Value (LTV)** position is immediately created.
   * Up to **80% LTV** can be borrowed based on LP collateral so 30% of the LP value is available to borrow against
     * The LP position is 2x the value of the underlying Favor Token so users see 60% return on their Favor position vs 50% return from selling.
2. **Manual LP Creation** – Advanced users can manually pair Favor tokens with their respective assets and deposit the LP directly. However, please do this via the BetterBank UI or contract, because if you don't you will get taxed on that transaction.

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Only Add Manual LP via our dApp going through any other method will result in a 50% tax and loss of funds.

<https://dapp.betterbank.io/groves/> Click on your Favor token of choice and click Add under Liquidity Options.
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**Collateral Valuation & Limits**

* Favor tokens are **priced in ratio** **to** their native asset, but for collateral purposes, BetterBank **only recognizes Favor prices up to 3.5x the ratio**.
  * This **protects the system from exploits through price manipulation** and helps ensure **borrowing remains safe and predictable**.

**Liquidation Mechanics**

If a Wildlands position reaches **85% LTV**, it becomes eligible for liquidation. Here's what happens:

* **50% of the LP collateral is seized** and broken.
* The blue chip portion **is claimed** and the Favor portion is **sold through an untaxed route**.
* **10% of the seized value is claimed by the protocol** as a penalty **to strengthen the Treasury**, increasing available borrowable assets for everyone.
* The protocol uses the remaining collateral to **repurchase and repay the borrowed assets**, bringing the position back to a manageable \~80% LTV.

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🛡️ **Esteem is never touched during liquidation.** Even after liquidation, your Esteem remains intact—ready to generate more Favor and rebuild your position
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**Risk & Wallet Management**

* The Wildlands is **risk-intensive**—positions can be liquidated quickly due to price fluctuations or high utilization.
* **Never mix Wildlands and Stronghold assets in the same wallet.**
  * If a Wildlands position is liquidated, **Stronghold deposits in the same wallet may also be affected**.
  * **Use separate wallets** for each to minimize risk.

**The Wildlands’ Role in BetterBank**

* **Powers the protocol’s decentralized credit system**.
* **Replaces the need for centralized trust** in banking with fully algorithmic collateralized lending instead of fractional reserve banking based on "good bank management".
* **Fuels liquidity and borrowing** across the BetterBank ecosystem.

The Wildlands is where **seigniorage controlled credit meets capital efficiency**—designed not for speculative defi investment, but for **true on-chain financial engineering**. For users who are willing to understand DeFi mechanics and risk, it unlocks powerful new tools for strategic borrowing and yield. 🧠🔥