In the demand market, the positioning of Criptlán users has changed; they are both depositors and lenders. The platform will use the funds from depositors/lenders to provide collateralized loans to borrowers. Depositors will earn continuous interest income from lending. Since these are collateralized loans, the safety of depositors' funds will be maximized.

Lending Protocol

The Criptlán lending protocol is built on an EVM (Ethereum Virtual Machine) smart contract framework. It facilitates the entire process from depositors depositing cryptocurrencies to borrowers taking out loans. It also manages the repayment of debts by borrowers or the forced liquidation of debts, allowing depositors to earn interest. All of these processes are automated through smart contracts, which we refer to as the blockchain service architecture.

In the Criptlán lending protocol, smart contracts fulfill their mission by ensuring that both borrowers and lenders operate under fair rules. Additionally, new content can be added to the smart contracts through community proposals, enhancing the protocol's functionality and adaptability.

Loan Interest Rates

The logic of the Criptlán lending protocol is based on a liquidity pool. Deposit users (depositors) provide ample liquidity to the Criptlán lending pool, similar to customers depositing funds in a bank. Borrowers will need to use excess mainstream currencies (such as ETH) as collateral to obtain on-chain loans. The Criptlán lending protocol operates as a matching system and does not retain any assets from users.

When Funds Are Available: The interest rates for loans will be lowered to encourage borrowing. If no loan requests are initiated within 24 hours, any remaining funds in the liquidity pool will be sent by the smart contract to the Polygon liquidity pool to maximize returns.

When Funds Are Insufficient: The interest rates for loans will be increased to suppress borrowing, while interest subsidies will be provided to encourage users to deposit funds.

Profit Distribution

When borrowers repay their debts, they are required to pay the principal amount X(1+loan interest rate) to the Criptlán lending protocol. A portion of the profits generated will be allocated as ecological incentives to the treasury, while the majority will be distributed as interest to depositors. The earnings depend on the amount of cryptocurrency deposited by the users.

The interest earned by depositors is not distributed in real-time but is issued in the form of fixed returns. Depositors can determine their interest income based on factors such as the type of cryptocurrency deposited, the profit rate, and the deposit period. Additionally, if the interest is not withdrawn, it will be reinvested in capital-preserving financial products, providing users with compound returns.

Forced Liquidation

To better protect the funds of depositors, the Criptlán lending protocol must implement forced liquidation; however, these regulations are not fixed and may change based on community proposals:

If a Borrower Fails to Repay on Time: If a borrower does not complete the repayment within the specified timeframe, the Criptlán lending protocol will liquidate the borrower’s collateral at the optimal price to repay the debt. Any funds exceeding the debt will create additional returns for depositors.

If the Value of the Borrower’s Collateral Drops Below the Loan Amount: If the value of the borrower’s collateral plummets below the loan amount, the Criptlán lending protocol will promptly liquidate the borrower’s collateral to repay the debt. Any losses incurred will be compensated to depositors from the Criptlán treasury.

Redemption of Deposits

Depositors can initiate a redemption unconditionally. Once a depositor redeems their funds, it means they will no longer earn any returns. If users choose to deposit assets again after redemption, they can continue to earn returns. The Criptlán lending protocol does not keep a record of users' historical deposits; profit distribution will be based solely on the current deposit amounts and community relations.

Criptlán is actively working on optimizations and will soon enhance its lending functionalities. In the future, three types of lending services will be offered:

Collateral & Borrowing: Borrowers can use digital assets such as BTC as collateral, selecting their loan term and interest rate.

Lending & Wealth Management: Lenders can invest USDT into Criptlán, choosing corresponding lending conditions such as loan duration and interest rate.

Matching & Completion: The platform will match borrower demands with lender conditions, allowing borrowers to access funds immediately.