dLend allows users to borrow DAI tokens (DAI in this example) using their rLP tokens as collateral. The module is designed to incentivize liquidity provision in the Delta ecosystem, while also providing users with a way to acquire DAI without having to sell their rLP tokens.
Upon depositing their rLP tokens into the loan module, users’ rLP tokens will remain locked until the borrowed DAI tokens are fully repaid.
Users receive 10% of their rLP deposit immediately in DAI. The remaining DAI tokens will vest over time based on a block number schedule until reaching the liquidation threshold.
Users will receive a DAI loan that is increasing over time until reaching the liquidation threshold which if reached and the loan is not repaid the underlaying rLP is burned or sent to the DFV.
To prevent abuse of the system, there will be a limit on the amount of DAI tokens that can be borrowed based on the user’s initial rLP deposit. For example, the loan-to-value ratio could be set to 50%, meaning that a user can only borrow up to 50% of the value of their rLP deposit upfront and the rest is vested slowly until reaching the liquidation threshold.
To incentivize users to participate in the loan module, there will be a small interest rate charged on the borrowed DAI tokens. This interest rate could be distributed to rLP and Delta token holders as a form of yield.To further incentivize liquidity provision in the Delta ecosystem, a portion of the interest earned from the loan module could be sent to the DFV to reward liquidity providers. Also the opposite could be the case as well this could involve interest free loans because essentially you are slowly selling the rLP tokens but a small interest could also work.
Allows users to borrow DAI without having to sell their rLP tokens, which maintains liquidity in the Delta ecosystem.
Provides users with a safe and secure way to access DAI by using their rLP tokens as collateral.
Encourages liquidity provision in the Delta ecosystem by rewarding users with interest on their borrowed DAI and by sending a portion of the interest earned to the DFV to incentivize liquidity provision.
Provides a deflationary mechanism for rLP tokens by burning them if the loan is not repaid.
Delta Lend could be a powerful tool that enables users to borrow tokens using their rLP tokens as collateral while maintaining liquidity in the Delta ecosystem. The module incentivizes liquidity provision and provides users with a safe and secure way to access DAI. By burning rLP tokens if the loan is not repaid, Delta Lend provides a deflationary mechanism that benefits the entire Delta ecosystem.