💡Solutions

Peer-to-Peer

When creating an offer, a pool-offer is created where it remains isolated with your own conditions. If it is a lending offer, it can be accepted in small parts by different borrowers. This feature helps to improve the capital efficiency of high-value offers so that no single user needs to accept the entire offer, but instead, multiple users can accept parts of it.

Once the collateral is provided, a loan-vault is automatically created, which can only be interacted with by the lender and the borrower, ensuring that your loan is isolated from all others.

This isolation technique not only allows each offer/loan to have their own terms but also helps to enhance the security of the smart contracts.

Collateral interaction

With veNFTs, the user can borrow against their position and remain in control of the asset’s main functions while the loan is ongoing, allowing them instruct the vault what to vote, claim their rewards, and extend their lock for maximum yield.

That feature can transform a simple loan into a self-repaying loan. If the user votes and claims their rewards regularly, depending on the terms set, the yield from the voting rewards will cover part, if not all, of the interest owed to the lender, unlocking liquidity from an otherwise illiquid asset with minimal, if any, out-of-pocket fees.

Example:

• User borrows 100 USDbC (50% of the nominal value of their $200 worth veAERO position) for 30 days with 5% interest (~60% APR).

• Current average voting rewards APR on veAERO is 60%.

• The user will yield a 5% monthly ROI ($10) on their veAERO while paying 5% interest over 50% of their position ($5) for the same period.