Lender Guide

Liquidity Provider Path

Liquidity providers on Lendscape have two main options for contributing funds: Master Liquidity Pools and Lending Pools. Each option offers different risk-return profiles and flexibility.

Getting Started

To begin providing liquidity on Lendscape, follow these steps:

1. Account Creation: Create an account on the Lendscape platform.
2. KYC/AML Verification: Complete Know Your Customer and Anti-Money Laundering checks.
3. Risk Assessment: Review your risk tolerance and investment objectives.
4. Choose Your Path: Select between Master Liquidity Pool or specific Lending Pools based on your preferences.
5. Fund Deposit: Transfer funds to your chosen pool using supported cryptocurrencies.

Master Liquidity Pool vs. Lending Pools

Feature	Master Liquidity Pool	Lending Pools
Risk Level	Moderate (diversified across multiple loans)	Varies (specific to asset class)
Expected Returns	10-18% APY	15-30% APY
Asset Focus	Diversified	Specialized (by asset type)
Minimum Investment	Lower	Higher
Liquidity	Higher	Lower
Term Commitment	Flexible	Fixed

Lending Pools

Lending Pools on Lendscape are specialized pools focused on specific asset types or risk profiles.

Key Features

• Direct Matching: Lenders are directly matched to borrowers
• Customized Risk-Return: Choose pools with risk profiles that match your investment strategy
• Transparent Information: Full visibility into loan terms and collateral details
• Portfolio Building: Ability to spread investments across multiple loans within a pool

Interest Rate Structure

Lending Pools use a granular interest rate model compared to the Master Liquidity Pool:

• Base Rate: Set by pool governance based on the asset class
• Borrower-Specific Rate: Adjusted based on the borrower's credit score and collateral quality
• Duration Premium: Longer loan terms may offer different rates
• Collateral Factor: The loan-to-value ratio influences the interest rate

The formula used to calculate interest rates is:

Interest Rate = Base Rate + Borrower Risk Adjustment + Duration Premium + Collateral Factor

Rates are typically higher in Lending Pools compared to the Master Liquidity Pool due to the increased risk and specificity of loans.

Available Lending Pools

Lendscape currently offers the following specialized Lending Pools:

1. SAFT Pool: Focused on Simple Agreement for Future Tokens

   • Expected APY: 20-30%
   • Minimum Investment: $10,000
   • Typical Term: 6-12 months

2. Equity Token Pool: For tokenized equity investments

   • Expected APY: 15-25%
   • Minimum Investment: $5,000
   • Typical Term: 12-24 months

3. RWA Pool: For real-world asset tokenization

   • Expected APY: 12-20%
   • Minimum Investment: $2,500
   • Typical Term: 3-36 months

Risk Management for Lenders

Lendscape implements several measures to manage risk for lenders:

Protection Mechanisms

1. Collateral Over-collateralization: Loans are typically over-collateralized (e.g., 150-300% LTV) to provide a buffer against price fluctuations.

2. Liquidation Thresholds: Automatic liquidation processes are triggered if collateral value falls below a certain threshold (e.g., 120-150% LTV).

3. Insurance Fund: A portion of interest payments (typically 5-10%) is allocated to an insurance fund to cover potential defaults.

4. Diversification Limits: The platform encourages spreading investments across multiple loans to reduce concentration risk.

Monitoring and Management

• Real-time Monitoring: Blockchain oracles provide continuous updates on collateral values and loan health.
• Health Factor Metrics: Each loan has a health factor indicating its safety margin.
• Risk Ratings: Loans are assigned risk ratings based on borrower profile and collateral quality.
• Performance History: Track record of loans and borrowers is maintained for future reference.

Secondary Market

Lendscape offers a secondary market where lenders can:

• Trade their loan positions
• Exit investments before loan maturity (potentially at a discount)
• Increase positions in performing loans
• Diversify their lending portfolio

Lender Dashboard

The Lendscape lender dashboard provides comprehensive tools for managing your investments:

• Portfolio Overview: View all your investments across different pools
• Performance Metrics: Track returns, accrued interest, and projected earnings
• Risk Analysis: View risk distribution and diversification of your portfolio
• Transaction History: Complete record of deposits, withdrawals, and earned interest
• Auto-Investment Settings: Configure automatic reinvestment of earned interest

Frequently Asked Questions

How are returns distributed?

Returns are typically distributed on a monthly basis, with options for automatic reinvestment.

What happens if a borrower defaults?

The collateral is liquidated, and funds are used to repay lenders. Any shortfall may be covered by the insurance fund.

Can I withdraw my funds at any time?

For the Master Liquidity Pool, withdrawals are typically available with a short notice period. For Lending Pools, funds are generally locked for the duration of the underlying loans, but may be traded on the secondary market.

How are loan opportunities selected?

Loans undergo rigorous review, including borrower creditworthiness assessment, collateral valuation, and compliance checks.

Are my investments insured?

While not traditionally insured, multiple risk mitigation measures including overcollateralization and the insurance fund provide significant protection.

For additional questions or support with the lending process, please contact our support team.