Faq

Various questions I've been asked

When a loan term ends and the borrower doesn’t repay, what does happen?

In this case, a liquidation occurs. There is then two cases: 1. Either the borrower has the money in the protocol to repay the lender. In this case the lender get repaid its asset and interest in full. 2. Either the borrower doesn't have the money. In this case, the collateral is transferred to the lender, the lender can then withdraw the collateral and sell it.

What happens if the collateral value drops and isn't sufficient to cover the loan

In this case, there isn't an automatic liquidation like traditionnal lending protocol. The borrower can still repay its loan if he wishes, otherwise at the end of the loan a liquidation occurs. If the drop of value of the collateral is slight, the lender will still profit by obtaining the borrower's collateral, however if the drop of value is important then the lender may lose money. Different assets have different loan to value ratio, so a significant depeg has to happen for a lender to lose money.

Other related protocols

Pendle (not available on starknet) also allows user to fixed their yield: http://pendle.finance

In depth article (not written by me, quite naive) about p2p lending: https://www.bedlamresear.ch/posts/ob-lending

A non-exhaustive list of fixed yield dapp (mostly/all on EVM networks): https://cryptoyieldcurve.io/fixed-rate-ecosystem

Some inspiration from Solana: https://texture.finance | https://rain.fi