Overview
Last updated
Last updated
The ATM or Automatic Tranche Maker is a permissionless lending protocol that provides the most efficient borrow/lend experience for all stakeholders. With the ATM:
Lenders can create pools for any Object against any ERC20 and then every lender in that pool works together based on their individual risk and return (rate) profiles
Borrowers are then able to accept the aggregated loan offers, which are the most optimal terms for their borrowing objectives because each offer is a blended rate based on all lenders
The key innovation to the ATM are Liquid Credit Tokens ("LCTs"), a liquid, composable ERC-20 representing each lender's position within a pool. LCTs help scale liquidity even further because they:
Encourage longer duration loans: secondary liquidity for the lender during the loan term
Support/stabilize floor prices: more lenders at higher LTV loans reduce sell pressure
Maximize yield: composable tokens can be used within all aspects of DeFi
A basket of funds (made up many different lenders) used to originate NFT loans from a single collection.
No! Your deposit will likely be exposed to many NFT loans within the pool for that NFT Collection. Whenever you have an active deposit, you should think of that as the risk tolerance you have right now for the NFT collection to which you're lending.
Add to Queue = Your position is always active in the pool, whether the pool is utilized or not. Entering the redemption queue will move your funds into an inactive status, which will prevent it from participating in new loans
Withdraw = If there is enough cash, you will not have to wait to withdraw. However, if your funds are being utilized, you will have to enter the redemption queue above and wait until outstanding loans mature until you can transfer those funds into your wallet.
When a borrower defaults on a loan, MetaStreet puts the NFT up for a 24-hour auction. After the auction concludes, the principal and interest owed to the pool is returned starting from the lowest price (least risky Ticks).
If the NFT is sold for a value greater than the original borrowed amount, then the Borrower will receive the excess proceeds to prevent situations where a Borrower could have sold an NFT before defaulting to pay back the entirety of a loan.
In order to prevent Lenders from gaming the system by depositing and withdrawing at opportune times (i.e. right before maturity when interest is paid), Lenders "buy in" to the outstanding loans and over time the negative earnings will turn positive.