Borrowing and Lending
Last updated
Last updated
Select Wallet: Choose the wallet from which you want to initiate the borrow order.
Select Market: Select the market you wish to borrow from. The market specifies the borrowed token, network, and maturity date (e.g., USDC-ETH-31 JAN 2025).
Input Borrowing Rate: Enter the desired interest rate at which you want to borrow. This rate will be used to match your order with lending orders.
Input Borrow Amount: Specify the amount of tokens you want to borrow.
Select Collateral: Choose the collateral you want to use to secure the loan. This includes specifying the token and network (e.g., USDC-Ethereum).
Input Collateral Amount: Enter the amount of collateral you want to provide. The required collateral amount depends on factors like the Loan-to-Value (LTV) ratio, borrowed amount, borrowed token, and collateral token. TSI uses over-collateralization to protect lenders and mitigate liquidation risk.
Input Minimal Matched Amount (Optional): Enter the minimum amount you want your order to be matched with. Your borrow order may be fulfilled by multiple lend orders. If this field is left empty, the system's default value will be applied.
Capital Efficiency: When placing a borrow order, you only need to have 1/10 (the ratio varies depending on TSI policy) of the total collateral amount available in your wallet. The full amount will only be required if your order is matched.
Order Submission: After submitting the order, it enters a waiting state to be matched with a suitable lend order.
Order Matching Process:
When your order is matched, you'll receive a notification.
If you're the taker (your order matched with an existing order), you have 30 minutes to accept and sign.
If you're the maker (you placed your order first), you have 11.5 hours to accept the matched loan and sign the transaction.
The full collateral amount must be available in the borrower's wallet when accepting the matched order.
The full lent amount must be available in the lender's wallet when accepting the matched order.
Failure to accept and sign within the timeframe will result in order cancellation.
If the counter party doesn't accept the matched order and sign transactions, your collateral remains in your wallet and the matched order is revoked. The counter party should pay the penalty (1% of the lent amount token) and 80% of the penalty will be sent to you. The ratio and distribution of penalty varies depending on TSI policy.
Transaction Fee: When the loan is transferred, you'll receive the borrowed amount minus the borrower's transaction fee (for TSI).
Collateral Status: After you transfer the collateral to the lender's wallet, it becomes locked and cannot be withdrawn by the lender, ensuring your collateral is secure.
Collateral Management: During the loan period, you can add more collateral to improve your position or remove excess collateral if your position allows.
Loan Repayment: Before the maturity date, you must repay the loan principal plus accrued interest to the lender. After receiving the repayment, the smart contract will facilitate the return of your collateral.
Non-Repayment Consequences: If you fail to repay by maturity, the liquidation process will be triggered, and your collateral may be liquidated to repay the lender.
Select Wallet: Choose the wallet from which you want to initiate the lend order.
Select Market: Select the market you wish to lend to. The market specifies the token, network, and maturity date.
Input Lending Rate and Amount: Enter the desired interest rate at which you want to lend and the amount of tokens you wish to lend.
Select Accepted Collateral Tokens: Choose the collateral tokens you are willing to accept for your loan. This allows you to evaluate the risk of different collaterals and manage your lending preferences. Different collateral-borrowed token pairs have different LTV values.
Input Minimal Matched Amount (Optional): Enter the minimum amount you want your order to be matched with. Your lend order may be fulfilled by multiple borrow orders. If this field is left empty, the system's default value will be applied.
Capital Efficiency: When placing a lend order, you only need to have 1/10 of the total lending amount available in your wallet. The full amount will only be required if your order is matched.
Order Submission: After submitting the order, it enters a waiting state to be matched with a suitable borrow order.
Order Matching Process:
When your order is matched, you'll receive a notification.
If you're the maker (you placed your order first), you have 11.5 hours to accept the matched loan and sign the transaction.
If you're the taker (your order matched with an existing order), you have 30 minutes to accept and sign.
The full lending amount must be available in your wallet when accepting the matched order.
Failure to accept and sign within the timeframe will result in order cancellation and penalties.
If the counter party doesn't accept the matched order and sign transactions, your funds remain in your wallet and the matched order is revoked. The counter party should pay the penalty (1% of the lent amount token) and 80% of the penalty will be sent to you. The ratio and distribution of penalty varies depending on TSI policy.
Transaction Fee: When transferring the loan, you'll need to transfer both the borrower's transaction fee (deducted from the loan you transfer to the borrower) to TSI and pay your own lender transaction fee.
Collateral Receipt: After the borrower transfers the collateral to your wallet, it becomes locked and cannot be withdrawn by you, ensuring the borrower that their collateral is secure.
Conditional Collateral Transfers: You'll authorize the smart contract to conditionally execute collateral transfers for repayment, liquidation, and collateral removal processes.
Loan Repayment: At maturity, the borrower will repay the loan principal plus accrued interest to your wallet. Upon receiving the repayment, the smart contract will facilitate the return of the collateral to the borrower.
Non-Repayment Actions: If the borrower fails to repay by maturity, the liquidation process will be triggered automatically, and the collateral will be liquidated to ensure you receive your principal and interest.
TSI employs a secure and efficient on-chain settlement process to manage token transfers and guarantee the fulfillment of matched orders. This process utilizes smart contracts to minimize counterparty risk and ensure that both borrowers and lenders fulfill their obligations.
Real-Time Matching and Notifications:
Orders are matched in real-time on the TSI platform.
Both the lender and borrower are immediately notified of matched orders and can view the details in their respective consoles.
On-Chain Settlement Process:
Role-Based Timeline:
The order taker (whether borrower or lender) has 30 minutes to accept the matched loan and sign the transaction.
The order maker (whether borrower or lender) has 11.5 hours to accept the matched loan and sign the transaction.
Peer-to-Peer Transfers:
Assets are NOT transferred to the contract. The transaction is peer-to-peer directly between users' wallets.
The smart contract only approves and orchestrates these transfers.
The taker initiates by signing a transaction to transfer assets to the maker.
The maker then signs a transaction to transfer their assets to the taker.
Smart Contract Execution:
The smart contract's detector function confirms both parties have signed transactions.
Only after confirmation of both signatures does the contract trigger the actual transfers:
Transfers the loan from lender to borrower (minus the borrower's transaction fee)
Transfers the collateral from borrower to lender
Transfers the transaction fees to TSI
Order Revocation and Penalties:
If either party fails to sign their transaction within the designated timeframe, the matched order is revoked.
The party who failed to sign will be subject to a penalty (typically 1% of the lent amount).
80% of this penalty is distributed to the counterparty who did sign, and 20% goes to TSI.
The penalty percentages may vary based on TSI's policy.
Lender's Collateral Management:
Collateral Transfer and Locking: When collateral is transferred to the lender's wallet, it becomes locked and cannot be withdrawn by the lender.
Smart Contract Authorization with 10x Buffer:
Lenders authorize the smart contract to manage collateral by approving a transfer allowance of 10 times the initial collateral amount.
This 10x buffer is a strategic design choice that eliminates the need for additional approvals when the borrower adds more collateral or when the collateral value fluctuates.
The increased approval limit ensures seamless execution of all collateral-related operations without requiring the lender to sign multiple transactions throughout the loan lifecycle.
The approval is specific to each collateral token and cannot be used for any other purpose than managing the designated loan's collateral.
Smart contract logic ensures that approvals can only be utilized for legitimate loan operations (repayment, liquidation, or collateral adjustment).
Lenders authorize the smart contract to conditionally execute collateral transfers for:
Repayment: When the borrower repays the debt, the smart contract transfers the collateral from the lender's wallet to the borrower's wallet.
Liquidation: If liquidation is triggered, the smart contract transfers the collateral from the lender's wallet to the liquidator and transfers the equivalent debt value from the liquidator to the lender.
Collateral Adjustment: When the borrower adds or removes collateral, the smart contract manages these transfers between wallets.
Transaction Monitoring:
Both lenders and borrowers can monitor the status of their transactions within their TSI console.
The platform provides real-time updates on the status of each transfer, including:
Pending: The initial state when a transfer is created but not yet processed.
Waiting for Start: The transfer has been validated and is ready to be initiated.
Waiting for Signature: The transfer is awaiting necessary signatures or approvals.
Failed: The transfer encountered an error and could not be completed.
Revoked: The transfer was revoked due to non-fulfillment.
In Progress: The transfer is currently being processed and executed.
Completed: The transfer has been successfully executed and finalized.
Capital Efficiency:
Users only need 1/10 of the order amount when placing orders.
Full funds are only required when accepting and signing a matched order.
This design maximizes capital utilization while maintaining system security.
When a matched order is not fulfilled by the counterparty, the following penalty process applies:
Order Revocation: If the counterparty fails to accept the matched order and sign the required transactions within the designated time window, the matched order is automatically revoked. Your assets (collateral or lending amount) remain secure in your wallet.
Penalty Assessment: The non-compliant counterparty incurs a penalty for order rejection:
For Lenders: 1% of the lending amount in the matched order
For Borrowers: 1% of the collateral value in the matched order
Penalty Distribution:
80% is awarded to the compliant party (you) as compensation for the opportunity cost and inconvenience
20% is allocated to TSI as a platform fee
Penalty Collection Process:
The TSI system initiates a penalty transfer transaction that requires the non-compliant party's signature
The non-compliant party must sign this penalty transfer before they can withdraw their remaining locked assets (lending tokens or collateral) corresponding to the matched order
This mechanism ensures the penalty is properly collected before allowing further asset movement
Policy Flexibility: The exact penalty percentages and distribution ratios may be adjusted according to current TSI policies.
This penalty system helps maintain market integrity by discouraging frivolous order placements and ensuring participants honor their matched orders, creating a more reliable trading environment for all users.
