Lending Protocol Facilitator

as of 02/01/2025

Hatom’s Lending Protocol is an over-collateralized lending protocol deployed on the MultiversX blockchain. Users can either supply or borrow whitelisted assets by interacting with the corresponding money market smart contract. Suppliers earn interest on their deposits by receiving a share of the interest borrowers pay. On the other hand, borrowers can access liquidity without selling their holdings.

Alice supplies 100 USD worth of USDC, allowing her to borrow up to 80 USD worth of EGLD. This is why the protocol is said to be over-collateralized. In summary, she would receive interest from the 100 USD worth of USDC deposit and pay interest from the 80 USD worth of EGLD borrow.

The Lending Protocol will be extended by adding the new USH Money Market. This money market will work differently than any other money market with details provided in the following subsections.

USH Supply

Supplying USH to the Lending Protocol is not a valid interaction, as the protocol does not require lenders to satisfy borrowers' demands. Additionally, USH won’t be a valid collateral asset capable of increasing an account’s borrowing power.

USH Borrow

The Lending Protocol will be able to mint USH whenever there is a request to borrow USH. Of course, as with any other borrow, this borrow must comply with over-collateralization requirements. However, there is an important caveat. When a user requests a USH borrow, the default collateral factors $\text{LTV}_i$ might not apply. Instead, if defined, the USH borrower collateral factors $\text{LTV}_i^{\text{ush}}$ are used. The following relationship is satisfied for any asset $i$:

$$\text{LTV}_i^{\text{ush}} \leqslant \text{LTV}_i.$$

The underlying idea behind the different sets of collateral factors is to disincentivize users to back their USH borrows with certain assets without having to decrease the default borrowing power.

Alice has a borrowing power of 100 USD given her collateral distribution. She decides to become a USH borrower by taking a USH borrow. At this point, if USH borrower collateral factors are defined for her collateral assets, she will face a decrease in her borrowing power.