What is a floor rate?

A floor rate is the minimum conversion rate you're willing to accept on a deposit. It's an optional safety net that prevents your rate from dropping below a level you're comfortable with.

The protocol always uses the higher of your floor rate and your ARM-calculated rate:

• Market rate + spread = 1.08, floor = 1.05 → 1.08 (market wins)
• Market rate + spread = 1.03, floor = 1.05 → 1.05 (floor wins)
• Price feed is down, floor = 1.05 → Paused (feed outage halts the pair)

The floor protects you from the rate going too low. It does not protect against feed outages — those are a separate safety mechanism.

Set your floor based on your actual cost basis: the lowest rate where you still break even or make acceptable profit.