Loan Records

The loan records are represented as receipts that show borrowers' debt and they contain all of the necessary information about the loan regarding Add Collateral, Remove Collateral, Liquidation, and Repay. This information is rolled up to the Ethereum Mainnet by zkTrue-up, a zero-knowledge proof technology developed by Term Structure Labs. The information in a loan record is listed below.

• Collateral token and amount

• Debt (loan + interest) token and amount

• Maturity date

Add Collateral

Similar to other DeFi lending protocols, after the loan records are created, borrowers can add collateral to increase the collateral value to prevent the loan from being liquidated before the maturity date. Adding collateral is an on-chain transaction and borrowers can add the same type of collateral tokens only.

Remove Collateral

In addition to adding collateral, borrowers can also remove collateral in order to make their capital more efficient. Reducing collateral is an on-chain transaction.

The borrowers can take back some of their collateral before the maturity date. However, this action will result in the rise of the LTV ratio. The maximum amount of collateral that borrowers can take back is up to where the LTV ratio >= Liquidation Threshold, which is either 80% or 92.5%, depending on the collateral/borrowed token pairs.

The amount of collateral that borrowers can take back depends on the LTV ratio. The liquidation will be triggered when the LTV ratio greater than the Liquidation Threshold.