Decentralized lending

Decentralized lending is one of the core businesses of the entire DeFi financial ecosystem. The premise of lending is simple. The encrypted assets in the user's wallet do not generate interest income. You need to lend your assets to others to earn interest.

Decentralized lending refers to the economic behavior of matching borrowers and lenders through decentralized lending protocols, transferring assets immediately after the pledge is confirmed, and completing the lending behavior.

And this entire process relies on decentralized lending protocols, which provide the platform with a technical foundation for standardization and interoperability, and play a role in security management during the loan process. The entire process does not require the intervention and involvement of a third-party trust institution like traditional mortgage lending, nor does it require any information about the borrower and lender. At the same time, smart contracts are used to automate transaction settlement, simplifying the operation process and timeliness.

NPC's lending is similar to the current mortgage lending products on the market. It adopts the "over-collateralization" model to replace credit review, that is, the borrower must use assets with a value higher than the loan as collateral to ensure that the lender can obtain collateral to protect the assets from loss in the event of failure to repay the debt.

Matching model

Similar to the model in the traditional lending field, in NPC, smart contracts act as "guarantors" to assess the asset risks and borrowing needs of the borrower. The creditor decides whether to lend to the borrower based on the evaluation results provided by the "guarantor". At the same time, when the borrower cannot repay on time, the "guarantor" automatically executes the liquidation procedure to repay the interests of the creditor. The lender's funds will be locked during the lending period, and only after matching with the borrower will they start to earn interest.

Liquidity pool trading

NPC will also set up an internal liquidity pool and cooperate with ecosystems such as Binance, Uniswap, and OKE to gather market maker liquidity pools to provide sufficient liquidity guarantees for both borrowers and lenders.

In this model, borrowers and lenders trade through liquidity trading pools instead of matching with counterparties. The interest rate of each loan and borrowing is determined by the liquidity of a single currency asset pool, that is, it fluctuates by the ratio between the total amount of currency provided by lenders across the network and the total amount of demand by borrowers. NPC does not set a fixed loan period. Lenders can deposit funds into the loan pool to continue to earn interest and withdraw assets at any time. Borrowers have an unlimited contract period.