Use Cases

Use case as a lender

  • Allows any protocol to tap into its treasury and turn it into a lending & borrowing platform, on their own terms. Lenders can create loans out of their wallets or treasuries.

  • Borrowing power is unlocked for the protocol’s native token.

  • Vendor can act as a buyback mechanism. During a default period, the protocol simply get’s their own tokens back at a predetermined price acting similar to a buy-back mechanism.

Example of lending: A protocol has $10,000,000 in USDC. The protocol can then lend out those funds at an interest rate of 1% due at the end of the month. The lender knows exactly how much interest they could make and the exact date to expect the income.

Use case as a borrower

  • Deposit collateral instead of selling your tokens.

  • Borrow without worry of liquidations.

  • Reinvest the borrowed assets without a fear that the interest of the loan will outpace the yield.

  • Use it as a hedge against your deposited collateral. If you loan becomes greater in value than your collateral by the repayment due date, keep your loan and default on your collateral.

  • Request loans for preatty much any asset there is.

Example: A lender is accepting wETH as collateral with a lent token of USDC. You deposit your 1 wETH to receive $1,000 USDC at a fixed interest rate of 1% due at the end of the month. You can borrow the $1,000 USDC and farm at a higher interest rate of 10%.

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