Lender Rules

The lender can specify the token being lent, how much is being lent, which tokens can be used as collateral, which routes can be used, the minimum position size, and the max leverage.

Provided Token and Amount

Any ERC20 can be set as the provided token. The amount being lent must be staked into the Sand Castle contract.

Accepted Collateral

Any registered ERC20 can be set as accepted within the lending pool. A token is registered on our platform for a fee where it can they be used as collateral.

Accepted Routes

Any registered route can be set as accepted within the pool. A route can be registered on our platform for a fee.

Minimum Position Size

This is an amount described in terms of the provided token that prevents a position from being too small. This is needed so that liquidators will be incentivized to preform the liquidation. The collateral token is related to the leveraged token via the routes where an average price is queried.

Example: Assume 1 ETH = 4000 USDC

A lender is lending ETH, they accept USDC, and have a minimum position size of 0.1 ETH. Therefore, a borrower must form a position of at least 0.1 ETH. So if they borrow 0.05 ETH, then they must provide 0.05 ETH worth of USDC ( 200 ) to reach the 0.1 ETH.

Maximum Leverage

This is an amount that can be described as a ratio between the total position size compared to the user amount. This is important for limited high leverage positions.

Example: Assume 1 ETH = 4000 USDC

A lender is lending ETH, they accept USDC, and have a max leverage of 20x. Therefore, the largest amount that can be borrowed if the user amount is 4000 USDC is 20 ETH.

Maximum Loan-To-Value(LTV)

This is an amount that is a ratio between the total value of the provided token over the total value of the collateral. It is described as a percentage between 0 and 100%.

Example: Assume 1 ETH = 4000 USDC

A lender is lending ETH, they accept USDC, and have a max LTV of 80%. Therefore, the largest amount that can be borrowed if the collateral is 1 ETH is $3200.

Accepted Loan Types

A lending pool can limit the types of loans that can be made with it. The types of loans include flash loans, regular borrowing, and leveraged Uniswap v3 loans.