LOAN Protocol is a non-custodial decentralized lending protocol built on XPR Network consisting of two parties:
Depositors who lend tokens to a market
Borrowers who borrow the lent tokens from a market and pay interest to the depositors in return
As one does not know the parties who engage as borrowers, it is impossible to accurately assess a borrower's default risk. This risk is accounted for by requiring all loans to be over-collateralized.
Each borrowing market has a Collateral Factor, a percentage value determining the max a user can borrow versus their deposited value (common values are ~70%). Thus, to borrow $B, a borrower has to put up $C as collateral where the following holds:
$B <= $C x Collateral Factor
Generally, the collateral factor is lower for volatile markets and higher for more stable markets.
Watch this quick Guide to Lending on Metal X by x.com/paulgrey
The LOAN Protocol and Metal X Lending opens up a new possibility for borrowing and lending against multiple blockchains that were not previously accessible on Ethereum or other blockchain protocols. By using a system of smart contracts powered by the XPR Network, users can request and fulfill loans using cryptocurrency without the need for a central mediator and without regard for the parent blockchain protocol of the requested asset.
The XPR Network blockchain charges no gas or mining fees to end-users – transactions on XPR Network are free. Validators get rewarded in XPR for validating transactions.
Learn more about the XPR Network and ecosystem in our overview.
XPR Network & EcosystemCheck out the most frequently asked questions here with answers.
Metal X Lending FAQCheck out our explanations of common terms used.
GlossaryFollow our handy guides to get started.
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