Frequently Asked Questions (FAQ)
Last updated
Last updated
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 choices within the DeFi space.
The Lendr protocol creates the world's first liquid staked real world asset tokens tokens providing the opportunity to realize yields by enabling RWA assets to be seamlessly integrated and utilized across a variety of DeFi and Web3 protocols.
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Lendr.fi provides access to diverse asset classes on-chain for Web3 protocols, builders, and 3.4 billion adults globally.
Here is a of the Lendr protocol.
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
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.
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%.
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.
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:
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.
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.
~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.
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.
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.
A portion of the Lendr reward tokens' total suppy will be allocated for global causes and controled via the DAO.
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.
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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