Frequently Asked Questions (FAQ)
What is Lendr.fi?
Lendr.fi, or the Lendr protocol, is a decentralized protocol offering real-world asset (RWA) tokens, which are pegged to various asset indices, enabling secure, accessible, and flexible investment options in the DeFi space.
The Lendr protocol creates the world's first liquid staked real world asset tokens unlocking unprecedented returns and enabling RWA assets to be seamlessly integrated and utilized across DeFi and Web3 protocols.
Here is an expanded summary of the Lendr protocol.
What are Lendr's main features?
Lendr.fi provides access to diverse asset classes on-chain for Web3 protocols, builders, and 3.4 billion adults globally.
Here is a summary of the key features of the Lendr protocol.
What are Lendr's use cases?
Lendr's real world asset (RWA) tokens offer multiple use cases, including:
On-chain price exposure to any asset class
Revenue generation from the decentralized Lendr Protocol
Compatible with all existing DeFi protocols, including:
Lending Protocols
Decentralized Exchanges (DEXes)
Yield Farming & Liquidity Mining Protocols
On-Chain Wealth/Asset Management Platforms
Automated On-Chain Investment Strategies
On-Chain Leveraging Platforms
And more
Arbitrage opportunities to maintain token pegs
0% interest loans on RWAs
How can I earn rewards with Lendr?
There are four ways to earn rewards from the Lendr protocol:
Deposit RWA Tokens - into the stability pool and earn liquidation gains in collateral tokens (i.e. wETH) and reward tokens (LNDR)
Stake Reward Tokens (LNDR) - and earn the revenue from issuance fees (RWA tokens) and redemption fees (collateral tokens)
Liquidate Troves - under 110% collateralization for a reward (collateral tokens) and gas coverage
Stabilize Inflation Price - earn rewards by keeping the token peg through redemptions and issuance arbitrage.
Follow our Quick Start Guide to get started.
How do Lendr.fi RWA tokens remain over-collateralized?
The Lendr protocol uses the same method that decentralized stablecoins have used for years to keep all protocol RWA tokens over-collateralized:
110% Collateralization Minimum - To mint RWA tokens, users must provide at least 110% collateral and they must monitor their loan to keep it above the minimum.
Liquidations - If a users loan drops below 110% collateralization, any user can liquidate the loan which terminates the loan and increase the collateral ratio of the network
Recovery Mode - This is a backup system in case the total collateral ratio of the network drops below 150%. In recovery mode, any loan under 150% can be liquidated, and borrowing fees are 0%.
How do Lendr.fi RWA tokens/stablecoins maintain their peg?
The Lendr protocol uses a combination of issuance and redemption to maintain the token peg. Issuance returns the price to its correct value if the price is too high, and redemptions if the price is too low.
With issuance, users can mint new RWA tokens and sell them on the market.
With redemption, users can exchange RWA tokens purchased from the market for collateral at the target price.
Both methods allow users to make a profit for maintaining the target peg.
Note: Lendr real world asset tokens are NOT algorithmic/under-collateralized. The protocol is designed so that Lendr RWA tokens remain over-collateralized with on-chain collateral.
Liquity has used this system to maintain their token peg for years. Here is a comparison to other top stablecoins on speed to repeg using this mechanism:
How do Lendr real world asset tokens interact with the reward/governance token (LNDR)?
Lendr V2 uses a single reward/governance token known as Lendr (LNDR). This token interacts with the RWA tokens in the following ways:
Real world asset token stakers receive LNDR rewards for participating in the protocol (in addition to their liquidation rewards). This is known as "community issuance".
Reward tokens (LNDR) can be staked to receive rewards from RWA issuance and redemption fees.
LNDR can be used in governance to control the protocol DAO.
Learn more about the RWA staking pools and the reward token staking pool.
Why does the Lendr protocol use multiple tokens?
The Lendr protocol creates numerous RWA tokens, each of them is pegged to a different real world asset index like real estate, gold, and more. The Lendr protocol also has one goverance/reward token that is used across all RWA pools.
What early adopter incentives/rewards exist?
~25% of the total supply of Lendr reward tokens (LNDR) are reserved for RWA staking rewards and will be distributed over the course of 5 years.
These tokens are distributed more quickly at the start, creating early adopter incentives.
Are Lendr's real world asset tokens similar to Terra/Luna (UST)?
Absolutely NOT! Terra/Luna was an algorithmic stablecoin that was under-collateralized and had critical design flaws.
Lendr real world asset tokens are NOT algorithmic or under-collateralized.
Lendr real world asset tokens are fully backed and maintain 110%+ verifiable on-chain collateral.
Lendr real world asset tokens are designed to handle bank runs or price drops if they ever occur.
What would happen if a bank run occurred?
None of the Lendr real world asset tokens are algorithmic and they all remain overcollateralized.
The protocol is designed to maintain 110% collateral backing the system, which means that it is designed to handle a full exit/bank run.
How does Lendr support social good/global causes?
A portion of the Lendr reward tokens' total suppy will be allocated for global causes and controled via the DAO.
What is the long term vision for Lendr?
Our long-term vision for Lendr is to provide a number of decentralized real world asset tokens for use in DeFi, representing assets such as:
Commodities (Gold, Energy, etc.)
Real Estate
Stock Sectors (Healthcare, AI, etc.)
Art, Wine, etc.
Learn more about Lendr's long term vision here.
Who controls/owns the real world asset token collateral?
The collateral for all the Lendr real world asset tokens is owned and controlled solely by the decentralized smart contracts of the system. This means that the Lendr Labs team cannot access or control the collateral funds. If you lose access to your personal wallet keys we cannot help you withdraw from the protocol.
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