LendingVault
Locked Tokens at Work — IFR Lending against ETH
1. The Idea
A contributor has 100M IFR locked in the CommitmentVault. They mark 50M as lendable — available for borrowing, without actually moving the tokens.
Builders can borrow this IFR against ETH collateral to use for discount programs and user rewards. The contributor earns ETH interest. The tokens remain in the CommitmentVault the entire time.
Win-Win-Win: Contributor earns passive ETH. Builder gets IFR for their product. User benefits from discounts. And the IFR price rises through buy pressure.
2. The Complete Cycle
Six steps that reinforce each other:
- Builder borrows 10M IFR — deposits 200% ETH collateral. The tokens are allocated from the contributor's lendable pool.
- Builder uses IFR for user discounts — e.g. “Buy 5M IFR, lock them, get 30% off our SaaS.” User buys IFR to participate in the lock.
- User buys IFR on Uniswap → BUY PRESSURE
- 90 days later: Builder buys IFR back on Uniswap → BUY PRESSURE — to repay the loan.
- Interest is split: 50% → Contributor (ETH yield), 50% → Uniswap LP (pool becomes deeper and more stable).
- Deeper pool → less slippage → more builders want to borrow → CYCLE
3. Interest Rate Model
The interest rate dynamically adjusts to the utilization of the lending pool:
| Utilization | Interest Rate / Month |
|---|---|
| 0% | 2.0% (Base) |
| 25% | 3.0% |
| 50% | 5.0% |
| 75% | 8.0% |
| 90% | 15.0% |
| 100% | 25.0% (Penalty) |
Self-regulating: At low utilization, loans are cheap — this encourages builders to borrow and brings activity into the system. At high utilization, loans become expensive — this prevents overload and protects contributors.
No manual intervention needed: The interest curve is encoded on-chain. Governance can adjust parameters, but the system balances itself under normal conditions.
4. Collateral System
Every loan is secured by ETH collateral. The rules:
- Initial: 200% ETH collateral required (e.g. 10M IFR worth 1 ETH → deposit 2 ETH)
- Warning at 150%: Margin Call — builder has 48 hours to top up collateral
- Liquidation at 120%: Automatic liquidation — collateral is seized
- Liquidator bonus: 5% of collateral as incentive for liquidators
- Price reference: Uniswap TWAP (24h average) — prevents flash-loan manipulation
5. Why Every Default Benefits the Protocol
The system is designed so that both outcomes are positive for the IFR price:
Builder buys IFR on Uniswap to repay the loan.
Result: Buy pressure on Uniswap.
ETH collateral is automatically used to buy IFR on Uniswap.
Result: Buy pressure on Uniswap.
Core insight: There is no negative outcome for the IFR token. Repayment = buy pressure. Default = buy pressure. Both paths drive IFR demand through the Uniswap pool. The lending system generates structural, non-speculative buy pressure.
6. As a Builder — Step by Step
How to use the LendingVault as a builder:
- Browse Lender offers — On the Lending Market page you can find all available IFR pools with current interest rates.
- Deposit ETH collateral — At least 200% of the IFR value in ETH. Example: you want to borrow 10M IFR worth 1 ETH → deposit at least 2 ETH.
- Request a loan — On-chain transaction. The smart contract checks collateral ratio and availability automatically.
- Use IFR for your product — Deploy the borrowed IFR for discounts, user rewards, or loyalty programs.
- After 90 days: repay IFR — Buy IFR on Uniswap and repay the loan + interest. Your ETH collateral is released.
FAQ
How safe is my ETH collateral?
The collateral is held in an audited smart contract. It can only be released in two ways: (1) you repay the loan in full, or (2) liquidation is triggered below 120%. No admin, no multisig, and no governance can move your collateral manually.
What if the IFR price drops sharply?
If the IFR price drops, your collateral ratio automatically improves — because you need less ETH to cover the IFR value. A falling IFR price is not a risk for borrowers, but an advantage. For lenders (contributors), the lock remains in place — their tokens are committed long-term regardless.
How do I find a lender?
The Lending Market page displays all contributors who have marked parts of their locks as lendable. You can see available amounts, current interest rates, and terms. Everything is peer-to-pool — no matching needed.