Borrowing
Users who want to borrow at a fixed interest rate can mint their fCash and sell it for currency. By selling fCash for currency, borrowers receive currency in exchange for the obligation to repay a fixed amount of currency at a specific future time.
First, a borrower deposits collateral into their Notional portfolio.
Then the borrower mints a pair of fCash tokens at their chosen maturity.
The borrower can now sell the positive fCash token into its liquidity pool in exchange for currency.
Now the borrower has currency they can withdraw and a future obligation to repay a fixed amount of currency collateralized by their ETH.
As the loan approaches maturity, the borrower can either repay the loan or roll it forward to a future maturity. If the borrower doesn't repay the loan or roll it forward prior to maturity, a third-party can roll the borrower's debt to the nearest maturity on their behalf at a penalty interest rate.
Last modified 1yr ago