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Loans are offchain legal agreements. The protocol records their effect on the vault.

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Lifecycle

  1. Funding. Capital moves from the vault to fund the loan offchain. The vault’s books record a loan in place of cash.
  2. Interest. Interest received is shared out monthly, after fees and the reserve. See Staking and payouts.
  3. Repayment. Principal returns to the vault and is lent again.
  4. Impairment and default. See Defaults and impairments.

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Loan type

Short-term bridge loans secured by first liens on real property. See Loan terms. [TBD: how loan records are reflected onchain]