Lending

Lending

Users who want to lend their currency at a fixed interest rate can buy +ve wtoken. A lender exchanges their currency at the time of trade for a greater, fixed amount of that currency at a specific point in the future. The exchange rate that the user gets implies a fixed interest rate on their loan between the moment they trade and the time that their +ve wtoken matures.

In the following example, a lender wishes to lend 100 DJED on Kulfi at a fixed rate for one year. The lender first deposits 100 DJED to Kulfi liquidity pool for 105 wDJED. When the loan matures, the lender can redeem their 105 wDJED convert to 105 DJED. When the loan matures, the lender can redeem their wtokens for currency.