Lender First Pool
In this pool variant, lenders create pools with custom terms and seed it with lend funds. After the pool has been deployed, any number of borrowers can borrow from the pool until the funds have been depleted. The borrowers have until the repayment due date to repay. If they do not, they default their collateral but keep their loan. Partial repays are also supported. Once the pool has expired, lenders can collect all remaining tokens in the pool including the interest they have received.
As a borrower, it is recommended to default your collateral to the lender if the pool's LTV is > 100% as that would indicate the value of your loan has surpassed the value of your deposited collateral.
User Actions
Once a lender has deployed a pool, the lender can:
Deposit Funds
Adds lend funds to the pool to be borrowed out. The lender can deposit funds as many times as they wish until the repayment due date.
Withdraw Funds
Withdraws lend funds from pool. Lender can withdraw as many times as they with until the repayment due date or until there are no more funds to withdraw.
Collect Tokens
After the repayment due date has passed, lenders can retrieve all remaining tokens from the lending pool, encompassing lent funds, defaulted collateral, and accrued interest.
Whitelist Rollover pool
Lenders can whitelist a new lending pool to allow borrowers to rollover their debt into the new pool with further expiry. See Rollovers for more information.
Update Borrower
Within private lending pools, lenders can whitelist or blacklist any address to be eligible to borrower from the private lending pool.
Change pool ownership (not recommended)
You can transfer pool ownership to another address, though this feature isn't integrated into the UI. Feel free to contact us on Discord for assistance.
Change Fee Rate
Lenders possess the flexibility to adjust their pool's interest rate at any given moment. It's important to note that this alteration will not impact the rate for borrowers who have already taken out loans.
Pause Borrowing
Halts future borrowing operations.
Once a lender has deployed a pool, anyone seeking to borrow can:
Borrow Funds (take out loan)
Users can deposit collateral tokens in exchange for lend tokens, a process they can repeat as often as desired, provided they have adequate collateral.
Repay Loan
Borrowers have the option to make partial or full repayments, with the corresponding amount of collateral being returned to them on repayment transaction. They can utilize this repayment option multiple times until their entire debt is fully settled.
Default on Loan
If the borrower does not want to repay, they simply don't. A case where this would happen is when the value of their loan surpasses the value of their deposited collateral at the repayment due date. In other words, if the pools LTV is > 100%.
Rollover
When a lender offers a rollover pool, borrowers have the opportunity to transfer their debt from the original pool to the designated destination pool - the idea being to extend their duration.
Terms
As a pool creator (lender), you will be able to set the below terms when deploying your lending pool.
Pool Terms
Collateral
Token that lender wishes to accept as collateral
Lend Token
Token that lender wishes to lend
Lend Ratio (LR)
Describes the relationship between lend token units and deposited collateral units. For instance, an LR of 100 signifies that 100 lend tokens are loaned per unit of deposited collateral
Initial Deposit Amount
Amount of lend tokens you would like to deposit in single pool creation transaction
Due Date
Loan repayment or default deadline.
Oracle Protection
When enabled, automatically disables the pool from being borrowed from if the value of the loan would be greater than the value of the collateral. This is to protect lenders from undercollateralized borrowing.
Pool Rate
While you have the flexibility to choose any APR you prefer, it is advisable to opt for a sensible rate. Doing so will attract borrowers more effectively to utilize your pool for borrowing.
Term Rate Type
Two rate types:
Fixed APR - Annualized at the chosen APR.
Fixed Rate - Constant borrower payment regardless of proximity to due date.
APR
The interest rate applied to the chosen "Term Rate Type"
Borrowers
This acts as a whitelist for private lending. Leave empty to keep pool public. If public, the pool cannot be made private later. The decision to make your pool public or private must happen in the pool creation phase.
Certain strategies are applicable to specific tokens or pool types. Any usable strategy will be displayed here. See Strategies for more information.
Fees Involved
Borrower fees
Protocol Fee
0.3% of borrowed funds are allocated to the protocol treasury upon loan initiation
Lender Fee
This represents the interest paid to lender's at the inception of the loan. This amount comes out of the borrowed funds and stays in the pool.
*Both fees are applied when rolling debt over between pools
Example:
Protocol fee = 0.3%
Loan APR (interest rate) = 1%
1) Borrower takes loan of 1000 USDC
1000 * 0.3% = 3 USDC -> Sent to protocol treasury
1000 * 1% = 10 USDC -> Remains in pool to be collected by lender after repayment due date
1000 - 3 - 10 = 987 USDC -> Sent to borrower
*Borrower fees are subject to change if deemed necessary
Lender Fees
The lender incurs no fees.
Rollovers
A rollover pool is the same as any other pool that is created. The only difference is the rollover pool has a further out expiry and the lender must whitelist it. Additionally, a rollover pool must be deployed from the same address you deployed the original pool with.
The collateral and lend token of a new pool must be the same as in the origin pool for the new pool to be considered a rollover pool. The Lend Ratio, Interest Rate and Expiry can be different from the prior pool!
Example:
1) Lender creates WETH<>USDC pool with repayment due date of May 1st (pool A)
2) Borrower borrows from pool A
3) Lender creates new WETH<>USDC pool with repayment due date of June 1st (pool B)
4) Lender whitelists pool B from pool A to allow borrowers from pool A to rollover their debt into pool B, thereby extending their loan.
5) Borrower rolls their debt over from pool A to pool B, effectively granting them a loan extension to June 1st. At this point, the borrowers debt and collateral are associated with pool B, so any future repayments will be done in pool B.
To add your new pool to the rollover list, go to the "My Pools" tab, select the desired pool, then click on the "Set Rollover" tab under Deployed Pool Options. You'll see a list of eligible rollover pools.
Once enabled, borrowers from your origin pool can rollover their debt from the origin pool to the destination pool.
Undercollateralized Borrowing Protection
Oracle Protection, as indicated in the pool terms section, allows lenders to activate or deactivate undercollateralized lending. If the tokens within your pool are linked to an oracle, our Vendor lending pools possess the capability to automatically halt borrowing if the value of the lend tokens exceeds the collateral amount that a borrower wants to deposit. This serves as a safeguard for situations where the prices of the pool tokens experience price fluctuations, and protect lenders from losing money.
Note:
Lenders retain the option to manually pause their pools whenever desired, accessible through the "My Pools" tab. The oracle check is performed precisely at the moment a borrowing transaction is initiated.
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