Lending

This page covers Deposit, Withdraw, Interest Accrual and Liquidations from Strategy.

Strategies are isolated ERC-4626 lending markets that define:

• Loan & collateral assets

• LTV parameters

• Interest models

• Liquidation parameters

• Curve slices (ticks)

• Debt and collateral accounting

Borrowing never happens here directly—only through the orderbook. Repayment and collateral operations always happen inside strategies.

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1. ERC-4626 Lending

Deposit

strategy.deposit(amount, receiver);

Withdraw

strategy.withdraw(amount, receiver, owner);

Redeem Shares

strategy.redeem(shares, receiver, owner);

Deposits increase strategy liquidity → which alters tick quotes → which updates the orderbook.

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2. Tick Engine (Strategy → Orderbook)

Every strategy defines a curve that is sliced into 1–10 ticks.

A tick contains:

struct Tick {
    uint256 rate;          // interest rate
    uint256 ltv;           // maximum borrow LTV
    uint256 liquidity;     // available liquidity
}

After deposits/withdrawals, the strategy:

1. Recomputes ticks

2. Pushes updated ticks to the orderbook

This is how the orderbook knows the global credit landscape at all times.

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3. Interest Accrual

Strategies use an index-based model:

debt = principal * borrowIndex

BorrowIndex grows based on:

• utilization

• interest rate model (IRM)

• time elapsed

Accrual happens on interaction or via explicit update calls.

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4. Liquidations

A position becomes liquidatable when:

health < LLTV

Where:

health = collateral_value / debt_value

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4.1 Soft Range

When slightly underwater:

• Flat liquidation bonus (3–10%)

• Collateral seized is capped (10–50%)

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4.2 Hard Range

When deeply underwater:

• Bonus increases quadratically up to full liquidation

• Collateral seize cap disabled

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4.3 Liquidation Call

strategy.liquidate(borrower, repayAmount);

Liquidator receives:

collateral_seized = repayAmount * bonusFactor

Strategies enforce all liquidation math internally.

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5. Reading Strategy State

Developers can read:

strategy.totalAssets();
strategy.totalBorrow();
strategy.debtOf(user);
strategy.collateralOf(user);
strategy.healthOf(user);
strategy.getUtilization();

Each strategy must be queried individually — no shared accounting exists.

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This completes the strategy model. Next page covers borrowing using order books.