How it works

Liquidity providers

Liquidity providers deposit USDG into the stability pool. They earn no interest by design. Their return comes from liquidation gains, collateral acquired at a discount when positions are liquidated, and from protocol token rewards.

Borrowers

Borrowers lock approved tokenized assets as collateral and draw USDG from the pool. Instead of a running interest rate they pay a fixed one-time origination fee, so the debt stays exactly the same until it is repaid. Once the drawn amount is returned, the collateral is unlocked.

Partnership financing

For financing tied to a business or a productive asset, the pool can act as a partner instead of a creditor. Profit is shared at a pre-agreed ratio and genuine losses fall on the capital. The full structure is described in the financing model.

Liquidation

If the collateral value falls below the required level, SAFIX liquidates part of it to protect the pool. The liquidated collateral flows to the stability pool at a discount and becomes part of liquidity provider returns. Partial liquidation restores the position to a healthy ratio without closing it.

Loan lifecycle

1. 01A borrower locks approved tokenized assets as collateral.
2. 02The network privately verifies ownership, value, eligibility, and existing debt.
3. 03USDG is drawn from the stability pool for a fixed one-time origination fee. No interest starts accruing.
4. 04The borrower repays exactly the amount drawn, whenever they choose.
5. 05The collateral is unlocked after a fixed redemption fee. If its value drops below the required level before repayment, part of it is liquidated.