Lending and borrowing

02In short

1. Borrower: post a request with an RA/TAZ pool, the TAZ you want, the term and the interest rate you ask.
2. Lender: register once (an Aether ID profile and 1 TAZ), then send an offer. Your TAZ waits in escrow.
3. Borrower: accept the offer you like. The pool is pledged, and the TAZ, minus the 1 percent opening fee, lands in your wallet.
4. Borrower: repay any time before the due date. The pool comes back in the same transaction.
5. Once the loan is repaid: claim the TAZ reward if the loan qualifies, and the borrower can review the lender.

03Who is who

Only an RA/TAZ pool can back a loan; every other pair, v3 LP certificates and plain token deposits are refused. Loans are priced from one reference pool, RA/TAZ pool #33 on mainnet, whose liquidity is burned or time-locked.

Gas is paid in KCAL as everywhere. Transactions that store new data, such as posting a request, accepting an offer or registering, also need a little SOUL in the wallet for the network's data fee, usually well under 0.1 SOUL. Keep about 1 SOUL. Saturn charges nothing in SOUL.

04Borrowing, step by step

1. Open Lending, Post request. Choose the pool, the amount of TAZ you want, the term (7 days to 1 year), the interest rate you ask, a message, and how long the request stays open (1 to 30 days). Posting creates your credit profile at 200 points; lenders see it next to your request.
2. Offers arrive in My positions, Requests. Each shows the lender, a rate, a term and an amount. A lender may offer the rate you asked, a lower one, or a higher one as a counter-offer: a counter-offer is marked as one, and the accept dialog shows how much more interest it costs over the term. The lender's name links to its page with its record and reviews.
3. Accept the one you like. The pool is pledged: the vault holds its SATURN certificate while the loan runs. The TAZ lands in your wallet minus the 1 percent opening fee. An offer from a lender who has paused, closed or been suspended since cannot be accepted; pick another.
4. Repay from My positions, Loans. You can pay any amount at any time. Once the total owed is paid the loan closes and the certificate comes back to your wallet in the same transaction.
5. Right after the final payment the page asks you to sign the TAZ reward claim. Then you can review the lender on its page.

05Lending, step by step

1. Register once on Lending, Lenders: link your Aether ID profile and pay the registration fee, 1 TAZ. See Registered lenders.
2. Open Lending, Marketplace. Each request shows the borrower's credit score, the amount, the term, the rate asked, the collateral pool and what it is worth.
3. Press Offer quote. Set your rate: the rate asked, a lower one, or a higher one as a counter-offer, up to 100 percent a year on this page (the contracts only want a rate above 0). Then the term, the amount, and how long the offer stays open. The form shows the loan-to-value your offer would open at, with an amber note above the 90 percent line and a red one above 100 percent, where the debt is worth more than the pool; there it asks you to confirm before you sign. No contract caps the amount: sizing the loan against the collateral is your call.
4. Sign. The TAZ moves into escrow on the market contract so the borrower can accept without waiting for you.
5. Nothing opens until the borrower accepts, counter-offer or not. Until then you can withdraw the offer and the TAZ comes back.
6. Your share of every repayment waits in an escrow in the loan contract; withdraw it from My positions, Loans, whenever you like. Nothing about your wallet can make a borrower's payment fail.
7. If the borrower misses the due date by more than 3 days, or the loan-to-value rises above 90 percent, you can take the pool; see below.

06The money

• Interest is simple, not compounding: principal times rate times days, divided by 365, for the whole term agreed, even if the loan is repaid early. A 1,000 TAZ loan at 15 percent for 90 days owes 37 TAZ of interest.
• The opening fee is 1 percent of the loan, taken from what the borrower receives. Saturn also keeps 10 percent of the interest; the lender gets the other 90 percent.
• The debt from day one is the loan plus the full interest for the term. Every payment reduces it.
• For your credit score, a loan is split into 30-day installments: a 90-day loan has three, one due every 30 days, and a loan of 30 days or less has one, due on day 30. A payment that comes more than 3 days after the installment date it covers counts as late and costs 30 credit points; one in time, or early, earns points. Paying off early, before an installment falls due, counts on time.
• The lender's right to take the pool does not follow the installments: it opens 3 days after the final due date. On a 7-day loan that is day 10, even though the credit score would still count a payment on day 12 as on time.

07Who gets the pool's fees during the loan

The borrower. The pool keeps earning its provider fees and the borrower can claim them from Liquidity at any time, loan or no loan. Fees come out of a separate claimable balance, not out of the reserves, so claiming them does not weaken the collateral. The lender's return is the interest written into the loan. Fees still unclaimed when a loan is liquidated or defaults go to the lender with the pool.

08What happens to the pool

• While the loan runs, the pool is pledged and the vault holds its SATURN certificate. Swaps, fee claims and adding liquidity carry on, and liquidity you add becomes collateral too. The pool cannot be removed, locked, burned, put in a reward campaign or listed on bonds, rentals or options, and its fee cannot be changed. Liquidity shows it with a pledged badge.
• Repaid in full: the pledge is released and the certificate comes back to the borrower in the same transaction.
• Liquidated or defaulted: in the lender's own transaction the lender becomes the pool's provider and receives its certificate. The whole pool goes: every reserve, the fees not yet claimed and any liquidity added during the loan, even when the pool is worth more than the debt. The lender can remove it from Liquidity or keep running it. The borrower keeps nothing.

A late default can cost far more than you owe. A default does not compare the pool with the debt: once 3 days have passed after the due date, the lender can take the whole pool, whatever it is worth. Until the lender does, you can still repay, late.

09Collateral value and the 90 percent line

The collateral is the whole pool at its fair value: 2 × √(RA reserve × TAZ reserve × P), where P is the TAZ price of RA in the reference pool. At that price it is simply twice the pool's TAZ side. A pool trading away from the reference price is worth what it would hold at that price, which is less than adding up its reserves. Swaps into your pool do not change the value; only a move in P does (and fees, which only add to it). The loan-to-value ratio is the remaining debt divided by that value. The line is 90 percent.

• Liquidation. If the ratio goes above 90 percent, the lender can flag the loan. Between 6 and 24 hours later, the lender can liquidate it if the ratio at the reference pool's average price since the flag is above the line. The lending admin can change that window; the Lending page shows the one in force. Nobody but the lender can flag or liquidate a loan.
• Each new flag by the lender replaces the last one and restarts the wait. So a lender whose window was spoiled by a short price jump can start again, and a price from before the latest flag never counts in the average.
• The average protects the borrower only if someone trades the reference pool during the window. A swap into the reference and back inside one transaction adds nothing to it, but a price someone pushes and holds counts for as long as nobody trades it back. The window gives the borrower and arbitrage traders hours to trade the price back, and the borrower can repay at any time, flagged or not, until the loan is closed.
• Default. Once three days have passed after the due date, the lender can declare the loan in default. Until then, and until the lender does, the borrower can still repay, late.
• Either way the loan closes, the whole pool goes to the lender, and the borrower loses 150 credit points.

10Lending more than the pool is worth

The contract sets no maximum when the loan opens. A loan for the full value of the pool opens above the 90 percent line, and so does one a little under it, because the interest counts as debt at once; it can be flagged for liquidation straight away. That does not protect the lender: liquidating gives the lender only the pool, so lending more than the pool is worth loses the difference if the borrower never repays. Lenders therefore quote well under the collateral's value. The Lending page warns a lender in amber above the 90 percent line and in red above 100 percent.

11TAZ rewards

A loan that is fully repaid can earn a TAZ bonus from Saturn's treasury: 30 percent to the borrower, 30 percent to the lender and 40 percent shared by the lender's RA pledgers. It needs a loan of at least 50 TAZ that ran at least 7 days and a lender with at least 50 RA pledged (lending itself needs no RA pledged; those loans just earn no bonus); it is at most 30 TAZ per loan and never more than half the fees the loan paid Saturn, so a loan between one person's own wallets always loses money. The bonus is claimed in a transaction of its own: anyone can send the claim, once, within 24 hours of the final payment. Saturn Ops asks the borrower to sign it right after the final payment, and shows a Claim button with a countdown on the repaid loan while the window is open. Defaulted and liquidated loans pay nothing. Full details under TAZ rewards for loans.

12Limits (mainnet)

13Questions people ask

Do I need to register to lend?

Yes. Only registered lenders can send offers or receive RA pledges. Register on Lending, Lenders: link an Aether ID profile and pay the registration fee, 1 TAZ. Borrowers do not register; their credit profile is created when they post.

Why was my accept refused with a message about the lender?

The lender paused, closed its registration or was suspended after sending the offer, so its offers cannot be accepted any more. Pick another offer. Nothing was changed.

Can I borrow more than my pool is worth?

No contract stops a lender from quoting it. Such a loan opens above the 90 percent line and can be flagged for liquidation straight away, but that gives the lender only the pool, so the lender loses what the pool does not cover. Lenders quote below the collateral's value, and the Lending page warns them in red before they sign.

Can a lender offer a higher rate than I asked?

Yes. The rate in your request is the rate you ask; no contract holds a quote to it. A lender may counter-offer a higher rate, up to 100 percent a year on the Lending page. You see it marked as a counter-offer, with the extra interest in TAZ, and nothing happens unless you accept it.

Does my credit score raise how much I can borrow?

Not in the marketplace. It sits beside your request so lenders can price the risk, and a good score gets better rates and more offers.

Can I cancel a request?

Yes, while it is open and unaccepted, from My positions.

What happens to my pool if I do not repay?

A liquidation or default gives the lender the whole pool: provider rights, certificate, reserves, unclaimed fees and anything you added during the loan, even if it is worth more than the debt.

Can a lender quote a different pool from the one I offered?

No. An offer must name the pool in your request, and the offer form shows it as fixed.

Where do my repayments go as a lender?

Into an escrow in the loan contract. My positions, Loans shows what is waiting and a Withdraw button.

Can a lender take back an offer?

Yes, any time before the borrower accepts it. The escrowed TAZ returns.

What if RA moves in price?

The value follows the square root of P, RA's price in the reference pool: a 21 percent fall in RA lowers it by 11 percent. A fall pushes the ratio up; a rise pushes it down. Watch the ratio in My positions and repay part of the loan to bring it down if needed.

Can someone swap into my pool to push my loan under?

No. Swaps keep the product of the two reserves, and the value depends only on that product and the reference price. A swap moves your reserves, not your collateral value.

Why does my wallet need SOUL?

Saturn charges nothing in SOUL. The network itself charges a small data fee in SOUL when a transaction stores new data, and refuses the transaction before it runs if the wallet holds too little. Nothing is changed then. Keep about 1 SOUL.