A loan, step by step
- Borrow PAPER. Choose how much PAPERVAULT to lock. You receive 95% × Hard Floor × collateral in PAPER, immediately. The 0.5% term fee is added to your debt, not deducted up front.
- Use the PAPER. Trade it, stake it on PaperTrade, hold it. Your PAPERVAULT stays locked in the loan contract and does not earn staking rewards while locked.
- Repay loan any time within 30 days: send back principal + 0.5%, your PAPERVAULT is unlocked in the same transaction.
- Roll instead: pay only the 0.5% fee and the term restarts for another 30 days, as many times as you like.
- Default: if the term passes with no repayment or roll, anyone can trigger the default. Your PAPERVAULT is burned. The debt is cancelled. You keep the PAPER.
Why nobody gets liquidated
Ordinary lending protocols lend against price, which can crash, so they need oracles and liquidators. Cooler loans lend against the Hard Floor, which is PAPER already sitting in a pool nobody can drain. 95% of that is always less than what the collateral is worth to the pool, in every market condition, so the loan is over-collateralised by construction. The contract never needs to look at the market price at all.
Max loan95% × Hard Floor × collateral
Term30 days
Fee0.5% of principal per term, paid in PAPER
Liquidation pricenone
Fee destinationlocked pool (floor) — fees raise everyone's backing
Worked example
1,000 PAPERVAULT as collateral
| Step | PAPER | PAPERVAULT | Note |
|---|---|---|---|
| Borrow (floor 1.112, 95%) | +1,056.40 | −1,000 locked | principal = 1,000 × 1.112 × 0.95 |
| Fee for the term (0.5%) | 5.28 owed | — | added to debt |
| Repay on day 20 | −1,061.68 | +1,000 unlocked | button: “Repay loan #id” |
| …or roll on day 29 | −5.28 | still locked | button: “Roll #id (+0.5%)” · new 30-day term |
| …or default on day 31 | keep 1,056.40 | −1,000 burned | no further claim on you |
Example uses the preview floor of 1.112 PAPER. The panel quotes the live floor.
FAQ
Loan questions
Is defaulting ever the smart move?
Only if 95% of the floor is more than the market price — that is, if PAPERVAULT trades below the floor, which the hook does not allow. In practice repaying always returns more value than you owe. The option exists so that nobody can ever be forced out of a position.
Does my locked collateral still earn staking rewards?
No. Collateral sits in the loan contract, not the staker. Repay to unlock, then stake.
Can the floor fall below my loan?
No. The Hard Floor cannot decrease, and the loan was sized at 95% of the floor at origination. It only gets safer with time.
Where does the 0.5% go?
Into the locked pool. Loan fees raise the Hard Floor exactly like trading fees and bonds do.
Can I have several loans?
Yes. Each borrow opens a separate loan with its own id, term and due date. The table on this page lists every open loan with its own “Repay” and “Roll” buttons.