Protocol
An overview of how Lendasat's protocol facilitates secure and efficient borrowing and lending transactions.
How does the Lendasat Protocol work?
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In closed beta we are using a 2-of-3 multisig contract and not DLCs. The keys are distributed among the borrower, lender, and Lendasat in line with current industry standards for security.**
- The protocol can be started by either the borrower or the lender by posting an expression of interest (EOI). If the lender proposes, this EOI is called a “Loan Offer”, if the borrower proposes, this is called a “Loan Request”.
- Borrowers can filter all available loan offers and send a “Loan Request” to the specific lender. The lender can accept or reject the request.
- Once accepted, a contract address is being shown to the borrower. The borrower needs to send the bitcoin collateral to said address
- Once the amount has been confirmed on-chain, the lender will release the stable coins to an address as specified by the borrower.
- After receiving the stable coins, the borrower has the option to pay back the loan (including interest) anytime before expiry of the contract - using stable coins.
- Once the lender confirmed he received the collateral, the borrower can withdraw the collateral into his own wallet.
How does the Virtual Card experience integrate into the protocol?
The protocol is essentially the same as for the previous point, except that instead of releasing the principal in the form of stable coins directly to the borrower, the lender releases it to our partner, the provider of the Virtual Visa Debit Card.
The loan still has to be repaid using Stable coins.