How to lend

A comprehensive guide to lending on Ambidex

The Ambidex protocol facilitates the lending of USDC to off-chain, real world institutional borrowers. Lenders deposit USDC into Ambidex smart contracts, and receive loan tokens representing their share of the total amount lent to a specific borrower. This USDC is off-ramped, and transferred to the institutional borrower's account. The off-ramp and on-ramp process for each loan token is handled by a uniquely incorporated special purpose vehicle (SPV), which eliminates any risk of contagion and mixing of funds between borrowers.

Loan Token Key Information

Ambidex makes use of smart contracts to facilitate the function of its loan tokens (eg. issuance, interest payments, redemption). Before lending, you should take note of key details such as the estimated interest payout (APR), the lifespan of the loan (Duration), the date at which no more USDC will be lendable to this specific borrower pool (Issuing Deadline), token name (Ticker) as well as the current status of the loan token (Status). This information is unique to each loan token, and displayed at the top of each loan token page.

Each loan token represents a share in a specific loan agreement with a single borrower, with a specified maturity date, and interest payment schedule. Each loan token will have an individual page on the Ambidex webapp. Loan tokens are fungible amongst tokens issued by the Ambidex protocol under the same Ticker. Loan tokens with different Tickers are non-fungible with each other.

Smart contracts facilitate the full functionality of the loan tokens, from issuance, to payment of interest, to redemption of principal. There are 5 possible statuses for a loan token on Ambidex. The normal progression for a loan token is from Issuing > Active > Matured. If insufficient funds are raised during the Issuing state, the loan token may enter the Canceled state. If the borrower becomes insolvent during the lifespan of the loan, the loan token may enter the Defaulted state.

Each Ambidex loan token will have its own unique Loan Token page. The information and functionality displayed on each Loan Token page will vary according the the state that the loan token is currently in.

The 4 possible Loan Token States

1. Issuing

When a loan tokens is in the Issuing state, lenders will be able to lend their USDC to borrowers. Users will receive loan tokens which represent the amount of USDC lent in a 1:1 ratio.

2. Active

When a loan token is in the Active state, the full supply of loan tokens has been issued. Users will be unable to lend anymore USDC to borrowers, and no new loan tokens representing this specific loan will ever be produced.

Lenders can now deposit their loan tokens on the Loan Token Issued page, and begin accruing interest. Interest payments will be claimable according to the stated APR and interest payment schedule. Lenders MUST deposit their loan tokens on this page in order to be eligible to claim interest payments.

3. Matured

When a loan token is in the Matured state, lenders can exchange their loan tokens and redeem their USDC principal. Lenders can also claim any remaining interest.

4. Canceled

Should there be insufficient USDC lent during the Issuing stage, borrowers will have the option to cancel the loan token, and return any USDC lent up until that point. This will result in the loan token entering the Canceled state. Should this occur, users who previously lent USDC will be able to re-claim their tokens.