Lending

ERC-20 collateralized loans.

Overview:

This platform caters to a wide audience by offering the flexibility to support any ERC-20 token as collateral. Users have the option to either lend or borrow, setting custom terms for each deal. This includes specifying the duration of the loan, the expiry date of the offer, the tokens requested in return, and the interest rate. Such personalized loan deals help match lenders' risk tolerance with borrowers' needs, ensuring mutually beneficial agreements.

Benefits:

1. Versatility: Accepts any ERC-20 token as collateral.

2. Customization: Tailor loan terms to suit individual requirements.

3. Transparency: Clear terms and conditions prevent misunderstandings.

4. Security: Collateral is securely held in a vault.

5. Automation: Validators/miners enforce agreements.

How It Works:

1. Loan Request: Borrowers specify desired terms including collateral type, loan amount, interest rate, and repayment schedule.

2. Review and Approval: Lenders evaluate requests and approve based on their criteria.

3. Agreement: Once both parties agree on terms, the loan is initiated.

4. Disbursement: Borrower receives tokens; collateral is locked.

5. Repayment: Borrower repays loan according to the agreed schedule. Upon completion, collateral is returned.

Lenders review loan requests to determine if they meet their criteria and risk tolerance levels. They can choose to fulfill these requests by agreeing to the borrower's specified terms. Once an agreement is reached, the terms are locked in, and the loan process officially begins. The borrower receives the requested tokens while the collateral remains in the vault as security. Both parties must then abide by the established terms, including repayment schedules and interest rates. This setup ensures transparency and security in the lending and borrowing process.

Lending Tool Features:

• Support for any ERC-20 token as collateral

• Option to lend or borrow

• Set custom per-deal terms:

  • Duration of the loan

  • When the offer expires

  • Tokens requested in exchange

  • Interest rate

Conditions:

• Borrow using any ERC-20 as collateral.

• A borrower has to deposit their collateral into the vault. Then create a loan request for a specific ERC-20 token and amount, at custom terms.

• These are time based loans, with an option for fixed duration loans.

• Loan amount can be in quote currency of the collateral token, or other.

• Collateral is measured at market value for both parties, during the entire loan lifespan.

• Lenders liquidity is transferred to the Borrower immediately, whereas the Borrowers collateral is held in the Vault until settlement.

• Collateral is not automatically liquidated on price volatility, the price can go below a threshold and still recover above it, during the lifespan of a deal. This means that if you put up 1000 GPU tokens as collateral for a 0.3 ETH loan, that will be paid back as 0.6 ETH. On expiry, the GPU tokens only need to have enough value to cover the 0.6 ETH owed, otherwise they are all liquidated to settle the debt.

• This settlement process is synthesized in our settlement function to give the same outcome in one function call, without needing to sell tokens.

Read PL/ Calculations for a deeper understanding into settlement.

P/L Calculations