Lending
Users who want to lend their currency at a fixed interest rate can buy fCash. 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 fCash matures.
In the following example, a lender wishes to lend 100 DAI on Notional at a fixed rate for one year. The lender first converts their 100 DAI into cDAI and then deposits that cDAI into the Notional liquidity pool for 105 fDAI. When the loan matures on December 1, 2021, the lender can redeem their 105 fDAI for cDAI, and then convert that cDai into 105 DAI.
When the loan matures, the lender can redeem their fCash for currency.
Last modified 1yr ago