Borrowing

The borrowing instrument allows makers to deposit collaterals, borrow digital assets and pay interest. Takers can deposit borrowing assets and expect interest as return.

Currently, the borrow instrument is 1 to 1 only, which means one borrowing issuance can be engaged by only one taker.

Borrowing Lifecycle

The image below shows the lifecycle of borrowing issuance and engagement.

  • When a borrowing issuance is created and the collateral token is deposited, the borrowing issuance becomes Engageable;

  • When a taker engages the borrowing issuance, a borrowing engagement is created and the borrowing issuance becomes Complete with a completion ratio of 10000;

  • When maker cancels an Engageable borrowing issuance, the borrowing issuance becomes Cancelled and the deposited collateral token is returned;

  • When taker deposits the principal token, the engagement is Active and the principal token is transferred to maker;

  • When the borrowing engagement is due or maker repays in full(principal + interest), the engagement becomes Complete. Borrowing issuance defines a borrowing-specific engagement property to determine whether it's Complete as it's due or repaid.

Borrowing Parameters

The borrowing instrument is highly customizable. It defines a set of parameters which allows both Service providers and makers to customize the borrowing instrument and its issuances.

Borrowing Service Provider Parameters

The following parameters allow Service Provider to customize the borrowing instrument. They are all defined in the borrowing instrument contract.

Borrowing Instrument Parameter

Description

Default

Max issuance duration

Maximum life of the issuance in seconds

14 days

Min issuance duration

Minimum life of the issuance in seconds

0

Max tenor days

Maximum life of the engagement in days

90

Min tenor days

Minimum life of the engagement in days

2

Max collateral ratio

Maximum collateral ratio with 4 decimals(0.01%)

200%

Min collateral ratio

Minimum collateral ratio with 4 decimals(0.01%)

50%

Max interest rate

Maximum interest rate with 6 decimals(0.0001%)

5.0000%

Min interest rate

Minimum interest rate with 6 decimals(0.0001%)

0.0010%

Borrowing Maker Parameters

The following parameters allow makers to customize the lending issuance. They are defined as the maker data in creating new lending issuance.

Borrowing Issuance Parameters

Description

Issuance duration

The duration of issuance in seconds

Lending token address

Lending amount

Collateral token address

Collateral ratio

The ratio of collateral to principal

Tenor

The duration of engagement in seconds

Interest rate

The per day interest rate to pay in principal

Borrowing Custom Property

Borrowing Issuance Custom Property

The borrowing issuance defines a set of custom property. It includes all the maker parameters shown in the previous section with the following additional fields:

  • Collateral amount: The actual collateral amount deposited. For borrowing engagement, the actual collateral value is computed at the time of issuance creation using the price oracle. Therefore, it's part of the borrowing issuance property.

  • Interest amount: The computed interest amount to pay

Borrowing Engagement Custom Property

The borrowing engagement also defines a set of custom properties.

  • Loan state: The state of the loan. Could be Unpaid/Repaid/Delinquent. It's useful to identify whether a borrowing issuance is Complete because it's due or repaid.