Liquidity Tranches & Non-Liquidable Loans

All earnings are gonna be distributed to the LPs of the protocol whenever RR >= X%ePOC (X tbd). To incentivize sticky liquidity and reward long term Liquidity Provides (LPs) the protocol will allow for the lockup of liquidity tranches up to X (X as long as the time to maturity of the non-liquidable loans) years and boost the APR of senior liquidity tranches.

To further increase the profitability of the senior tranches without excessively relying on cuts at the expenses of junior tranches or unlocked LPs, the protocol will seek to utilize the locked liquidity of senior tranches to finance Non-Liquidable Loans.

Non-Liquidable Loans will act as a mortgage-like, long duration loans with liquidation protection and fixed monthly installments on high interest rates, which will result in high and stable APRs for the senior tranches.

To protect LPs funds, non-liquidable loans will never provide undercollateralized credit under any circumstance. A Grace Period that will last up to X weeks will be granted after X skipped monthly payments, at the end of which the CDPs will naturally get liquidated so that the LPs will always be 100% protected from capital loss.