Fringe Lending

Fringe Lending is a non-custodial, permissionless DeFi lending facility.

Within Fringe Lending:

  • Lenders can deposit whitelisted assets to the Primary Capital Pools to earn interest from borrowers who borrow these assets.

  • Borrowers deposit whitelisted assets to the Primary Collateral Safes, which can be used as collateral against which they can borrow assets from the Primary Capital Pools.

  • Liquidators liquidate borrower positions that are below the minimum collateralization level.

The two diagrams below illustrate the key functions, participants, and interactions in Fringe Lending:

Users can interact with Fringe Lending in a number of ways, as diagrammed below:

Fringe’s Lending facility is comprised of the following key features:

  1. The Primary Capital Pools, which accepts a wide range of assets from lenders.

  2. Platform fees, a proportion of which are to be distributed as rewards to FRIN token stakers.

  3. Primary Collateral Safes, into which borrowers deposit collateral, which they use to secure loans.

Collateral types accepted into Primary Collateral Safes are assigned a Loan to Value Ratio (LVR) through our approach to parameter asset modeling.

LP token support

Whitelisted LP tokens can be used as collateral when borrowing assets on Fringe’s Lending Platform. This offers Fringe users unprecedented flexibility and access to the untapped value of Liquidity Pool tokens.

Through overcollateralized loans, liquidity providers can unlock this value without closing their LP positions, giving them access to capital to participate in other DeFi opportunities or increase their exposure to liquidity pool yields through leverage.

With this, Fringe Finance enables LP providers to further optimize their yield-earning positions.

Fringe’s v2 will implement this along with safety mechanisms that safeguard stability and platform solvency.

In the next pages of this section, we will explore in detail the user roles and mechanisms of Fringe Lending.

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