Pools FAQ

Defactor's Pools enable users to create and manage lending pools, allowing for secure and incentivised lending and borrowing of crypto assets. Our pools are designed to provide liquidity, facilitate lending, and ensure the security of both lenders and borrowers through robust smart contract mechanisms.

Pools offers a plug-and-play solution for token projects across EVM chains and Algorand, simplifying web3 development with an SDK and APIs. It provides customisable parameters for creating lending and borrowing pools tailored to your needs.

Use case examples

Aurus Protocol facilitates borrowers in utilising their gold fractions as collateral to secure loans through offering a digital representation of physical gold.

LandX offers users unprecedented access to loans secured against their xBasket tokens, transforming the landscape of financial services.

How do I get started with Defactor Pools?

To get started, complete the onboarding questionnaire to capture essential technical requirements, including whether the pool will be permissioned or permissionless and defining the initial setup requirements such as token sets, deadlines, and collateral token details.

What tokens can be used in Defactor Pools?

The specific ERC20 token pairs accepted as deposits must be specified during setup. For example, USDC from lenders and FACTR as collateral from borrowers.

How do I supply liquidity to a pool?

Connect your wallet to the platform, navigate to the desired pool, select the supply option, choose the amount to supply, and sign the transaction from your wallet.

When can I collect my rewards and capital?

Once a pool matures and all loans are repaid, your supplied funds and rewards are available for collection. If liquidation is required, you must wait until the process is completed.

How are my rewards calculated?

Rewards are calculated based on the duration of your deposit, the interest rate of the pool, and the utilisation ratio.

The formula is = Capital deposited * Duration * Interest rate * Utilisation ratio.

Do the pools need a maturity date?

Yes, we highly recommend that the pools have a maturity date. This is to further incentivise lenders to lend capital, as they know when capital is ready to withdraw - and for borrowers to pay back in a timely manner. The protocol also needs to know when to trigger a liquidation event, especially if the underlying asset is relatively stable.

How do I borrow crypto assets from a pool?

Connect your wallet to the platform, navigate to the desired pool, select the Borrow option, input the amount to borrow, and provide the required collateral. Sign the transaction in your wallet to complete the process.

How is interest calculated on my borrow position?

Interest accrues every minute the Borrow position is open until the pool’s maturity date. It is calculated using the formula = Amount Borrowed * Duration * Interest rate

What is the loan repayment process?

To repay a loan, go to the Borrow page (where you can see all your borrowed positions across different pools) or Pool page. select the Borrow position, review the details, pay the required amount, and sign the transaction from your wallet to reclaim your collateral.

What happens if I don’t repay my loan by the maturity date?

If the pool matures and you haven't repaid your loan, liquidation will occur. A part of your collateral will be sold to cover the borrowed amount, interest, and additional fees. The remaining collateral will be available for reclaiming after liquidation.

How does liquidation work for suppliers?

If loans are unpaid by the maturity date, liquidators will cover the outstanding balances, ensuring your supplied liquidity is secured. Once liquidation is completed, your liquidity and rewards will be available for withdrawal.

How can I participate as a liquidator?

If you’re interested in participating as a liquidator, please visit our Developer Docs to receive more information on how to do so.