Loan

What is a loan?

Lending is a function launched by Recovery to help users improve their financial flexibility, which will allow everyone to lend funds in Recovery Dapp to create more investment strategies.

Does the loan require collateral?

Yes, our users will have the option to borrow REC by providing USDT as collateral, as well as borrow USDT by providing REC as collateral. The Loan-to-Value ratio (LVT) is set at 65%, meaning that pledging 1000 USDT would allow a user to borrow REC tokens worth 650 USDT.

What is the interest on the loan?

The loan interest will be adjusted automatically by the system according to the actual market supply and demand. When the amount in the liquidity pool is insufficient, the loan interest will be increased, and when the amount in the liquidity pool is sufficient, the interest will be reduced.

Will the position be forced to close when the margin is insufficient?

Yes, if a user's loan amount is 83% of their collateral, we will initiate a liquidation process and sell their collateral to repay the loan. Therefore, users must monitor their own LVT to ensure that the margin is replenished in time to avoid forced liquidation. In the event of a forced liquidation, we will use any excess to burn REC.