Funded fixed-term credit

An offer contains committed cash

A lender specifies the collateral token and quantity, principal, fixed repayment, loan duration, offer expiry and settlement variant. Creating the offer transfers its entire principal into the contract. It is not an unfunded indication of interest.

The collateral must be allowed and different from the loan asset. Principal, collateral and duration must be positive; repayment must be at least principal; offer expiry must be in the future. Timestamp bounds are enforced. The lender cannot accept their own offer.

A lender can cancel an unaccepted offer at any time. At or after expiry, anyone can trigger cancellation, but the principal always returns to the recorded lender. The expiry of an offer and the maturity of an accepted loan are different events.

What the borrower receives

Acceptance moves collateral into custody, deducts the configured origination fee from principal and transfers the net loan amount to the borrower. The fee becomes earned at acceptance. Loan maturity is calculated from the acceptance time, not the offer-creation time.

The borrower can enforce a minimum amount received and maximum fixed repayment. The agreed repayment is the amount due even if the borrower repays early; the current implementation has no early-repayment discount or partial repayment.

Origination fee = floor(principal × fee bps / 10,000)
Borrower receives = principal − origination fee
Due time = acceptance time + duration

Borrower requests and funded refinancing

A borrower can publish a request specifying collateral, principal, maximum repayment, term and expiry. A request transfers no money. Lenders may escrow competing offers for that named borrower. One acceptance fills the request; other unaccepted offers remain refundable to their lenders.

An active borrower can refinance using a funded replacement with the same collateral token. The contract pays the old fixed debt from the new net advance and any bounded wallet top-up, reuses the escrowed collateral, and settles the difference. The borrower specifies maximum top-up, minimum cash returned and maximum new repayment. A failed bound or transfer reverts the entire refinancing.

Repayment from collateral uses an explicitly admitted exact-output adapter. The borrower caps collateral sold and supplies a deadline. The module grants only a temporary allowance, verifies exact input and debt output, pays the lender and returns remaining collateral to the borrower. The local service desk uses synthetic prices and funded test inventory. No production adapter or Route execution is enabled.

Repayment and the exact maturity boundary

Anyone can pay the full fixed repayment on behalf of the borrower at or before the due timestamp. The lender receives the repayment and all collateral returns to the original borrower.

Default settlement is available only to the lender and only strictly after the due timestamp. There is no overlap where both repayment and default are permitted. A transaction is evaluated at its included block time, not when the user first opened a confirmation screen.

There is no price-triggered liquidation before maturity in this term contract. That does not guarantee uninterrupted execution: chain availability, token restrictions, administrative recovery and upgrades can still affect the agreement.

Two different default settlements

For an ordinary collateral loan, the lender receives all of the agreed collateral after an unpaid maturity. The contract does not value or sell it, and does not calculate a market-value surplus to return to the borrower. Collateral worth more than the debt can therefore be forfeited.

For reserve credit, the contract redeems the claim-token collateral through the linked reserve. The lender receives up to the fixed repayment, and excess redemption proceeds return to the borrower. A shortfall is recorded explicitly.

If reserve redemption fails, settlement reverts and the loan remains recorded as active. It does not silently switch to a different settlement method. The failure requires incident resolution under the applicable controls.

Reserve backing is not loan cash

Reserve-credit offers are funded by lenders with separate loan assets. The reserve’s backing does not leave the reserve when the borrower receives the loan.

Fixed repayment must not exceed the reserve’s previewed redemption value of the pledged collateral both when the offer is created and when it is accepted. The current implementation does not add a separate reserve-credit haircut parameter. Production token and reserve behavior still require verification.