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A short guide to understand the basics of HopeLend
HopeLend is a decentralized non-custodial lending protocol with multiple liquidity pools. It enables instant loans based on the state of the pool, and loans do not need to be individually matched on both sides; instead, they rely on pooled funds, the amounts borrowed, and their collateral.
The diagram below describes the business flow of HopeLend.
hTokenstands for "HopeLend Token."
hTokens are yield-generating tokens minted and burnt upon supply and withdrawal of assets to HopeLend Pool, mapping 1:1 to the underlying assets supplied.
All yield collected by the hTokens' reserves is distributed to hToken holders directly by continuously increasing their wallet balance. The balance of hTokens of every depositor grows over time, driven by the perpetual accrual of interest in deposits.
hTokens are fully ERC20 compliant, which means hTokens can be sent to other addresses, and possessing hToken is equivalent to simultaneously holding ownership and earning rights to the deposited assets. hToken holders have the flexibility to redeem their assets at any time.
dTokenstands for Debt Token.
dTokens are interest-accruing tokens that are minted and burned upon borrowing and repayment, representing the debt owed by the token holder. There are 2 types of debt tokens:
- Stable-dTokens: represent a debt to the protocol with a stable interest rate.
- Variable-dTokens: represent a debt to the protocol with a variable interest rate.
The value of dToken is pegged 1:1 to the value of underlying borrowed assets and represents the current total amount owed to the protocol i.e. principal debt + interest accrued.
Users who provide liquidity or engage in lending activities will receive a share of the interest income and some $LT as a reward for their participation.
dTokens are not transferable.
The rates are determined by the supply and demand relationship in the market. HopeLend's interest rate algorithm is calibrated to manage liquidity risk and optimize utilization.
In order to interact with HopeLend, you simply supply your preferred asset and amount. After supplying, you will earn passive income based on the market borrowing demand.
Additionally, supplying assets allows you to borrow by using your supplied assets as collateral. Any interest you earn by supplying funds helps offset the interest rate you accumulate by borrowing.
When you borrow, there are a few things you should know about liquidation for the safety of your fund. Please refer to the following doc:
variable-dTokenswill receive $LT rewards. Holders of
stable-dTokenswill not receive rewards under the default configuration.
veLTholders will receive a share of the interest income.
HopeLend's contracts are currently running on Ethereum Mainnet.
The HopeLend Treasury Reserve is a fund held within the HopeLend protocol to address potential risks and adverse events.
If you want to dive more into the details about HopeLend protocols, please refer to the following docs.