➡️Lending

When offering a loan, lenders have the convenience of submitting one or more offers with their preferred amount and LTV (Loan-to-Value). They can then patiently await the acceptance of their loan by a borrower - while still having their ADA staked in their stake pool - eliminating the need to actively seek out borrowers.

This streamlined process allows larger lenders to provide substantial loan amounts without the need for detailed oversight or micromanagement.

LTV (Loan-to-Value) is a very important ratio when lending, we advise all lenders to understand the concept before submitting an offer.

The LTV ratio is the loan offer compared to the current floor price of the NFT. The higher the LTV, the higher the risk.

What happens to my ADA when my loan offer is accepted?

Your ADA will remain staked in your stake pool until it is accepted in a loan offer. As soon as it gets accepted, it will then be instantly sent to the borrower's wallet so they can use it for multiple reasons, therefore leaving your wallet through Levvy's smart contract transaction approval.

The ADA provided as a loan will continue to be staked in your stake pool until it is utilized by the borrower.

Moreover, it is important to note that the offered loans do not have a predetermined expiration date.

What happens to the borrower's tokens if the loan is not paid back?

In the event of loan default, the lender will have the option to foreclose the loan, receiving the tokens utilized as collateral.

What happens to the ADA if the loan is paid back?

Once the repayment is confirmed, the lender receives their ADA back in full + interest - fees. The borrower transfers the loan amount plus any accrued interest, back to the lender's designated wallet through the Levvy smart contract.

With the successful repayment, the lender's involvement in the loan concludes. The lender retains their ADA without any further obligations related to the specific loan agreement.

HOW TO LEND ON LEVVY

1. Open the website https://levvy.fi/ and connect the wallet of your preference;

2. Choose "Tokens";

3. Click on "Start Lending Now";

4. Choose the Token to which you want to provide liquidity for;

5. Follow the steps, sign the transaction, and you're done!

To lend, enter both the amount of ADA you would like to offer in total as well as the LTV that you want to offer it at. LTV is based on the current price of the token, so after you submit, it is important to watch the price of the token after you submit as the LTV will change.

LTVs for tokens should generally be less than NFTs as they are more volatile. Borrowers can take portions of your loan offer, so there is no need to try and match the amount you lend with the amount you think borrowers need.

Manage your loans by sorting through Pending and Active loans on the "Manage" tab!