How Lendland works

Introducing

Lendland is a decentralized system for borrowing on GeneChain network, it consists of a group smart contracts, you can find the source code on Github.

Lendlandhave supplying market and borrowing market. You can supply your assets to the supplying market to earn interest, also you can borrow different assets from borrowing markets once you have Collateral assets at supplying market.

Comptroller

The Comptroller is the risk management layer of the Lendland protocol; it determines how much collateral a user is required to maintain, and whether (and by how much) a user can be liquidated. Each time a user interacts with a eToken, the Comptroller is asked to approve or deny the transaction.

The Comptroller maps user balances to prices (via the Price Oracle) to risk weights (called Collateral Factors) to make its determinations. Users explicitly list which assets they would like included in their risk scoring, by calling Enter Markets and Exit Market.

eTokens

Each asset supported by the Lendland Protocol is integrated through a eToken contract, which is an EIP-20 compliant representation of balances supplied to the protocol. By minting eTokens, users (1) earn interest through the eToken's exchange rate, which increases in value relative to the underlying asset, and (2) gain the ability to use eTokens as collateral.

eTokens are the primary means of interacting with the Lendland Protocol; when a user mints, redeems, borrows, repays a borrow, liquidates a borrow, or transfers eTokens, she will do so using the eToken contract.

Price Oracle

We have developed a special price service that can dynamically obtain prices from the RADR market and the Novaswap market. The price in Lendland refers to these two markets and its update may be delayed to avoid the impact of sudden price changes on the lending market.

Governance

The Lendland protocol is governed and upgraded by LEND token-holders, using three distinct components; the LEND token, governance module (Governor Bravo), and Timelock. Together, these contracts allow the community to propose, vote, and implement changes through the administrative functions of a eToken or the Comptroller. Proposals can modify system parameters, support new markets, or add entirely new functionality to the protocol.

Supply assets

Supplying market is a place like a large pool of liquidity where users are contributing their assets. It is available for other users to borrow, and they share in the interest that borrowers pay back to the pool.

When users supply assets, they receive eTokens from Lendland in exchange.eTokens are ERC20 tokens that can be redeemed for their underlying assets at any time. As interest accrues to the assets supplied, eTokens are redeemable at an exchange rate (relative to the underlying asset) that constantly increases over time, based on the rate of interest earned by the underlying asset.

Config MetaMask & Network

Read GeneChain docs to prepare your MetaMask and corresponding network configuration.

Supply Assets

After you setup your MetaMask and network. You could visit the Dashboard page at https://lendland.finance/ to view and supply assets.

The left half of the page shows a list of all assets that can be supplied. If you have connected your MetaMask wallet, you can also see your wallet balance of these assets in the list.

Click an asset that you want to supply, on the popup window, you can fill the amounts that you want to supply, then click Approval and supply.

After successfully supplied, the assets you've supplied will be displayed on the top of the list. You can find your supplying balance both in token and us dollar, also including the APY and the estimated profit.

You can withdraw your supplying assets whenever you want. The earned interest will also be withdrawn together.

Collateral factor

You can see an option called Collateral on the supplying markets which is used to distinguish whether to use current assets as collateral. If you want to borrow some assets, you must enable this before you can borrow any other assets in the borrowing market.

A eToken's collateral factor can range from 0-90%, and represents the proportionate increase in liquidity (borrow limit) that an account receives by minting the eToken.

Generally, large or liquid assets have high collateral factors, while small or illiquid assets have low collateral factors. If an asset has a 0% collateral factor, it can't be used as collateral (or seized in liquidation), though it can still be borrowed.

When enabling Collateral of an asset, you should interact with the smart contract. Using MetaMask to complete the transaction on GeneChain to complete the operation.

Borrow assets

The Lendland Protocol allows users to borrow crypto assets, using any other supported asset as collateral — giving them the flexibility to settle a trade, or use an application, with an asset that they don’t already own.

For example, a user holding RNA may supply it to Lendland and borrow NOVA from Lendland instantly.

Config MetaMask & Network

Read GeneChain docs to prepare your MetaMask and corresponding network configuration.

Borrow Assets

You must have supplied assets to supplying markets and enabled Collateral before you can borrow any other assets in the borrowing market.

Firstly, you can view the assets listed on the right half of the dashboard page at https://lendland.finance/

This page lists the supported assets and their APY/Liquidity/Corresponding wallet balance. You can borrow an asset by clicking it:

Fill the amount on the popup window and click Borrow, then it will interact with MetaMask, sends transaction to GeneChain through MetaMask. After the transaction is succeeded, borrowed assets will be displayed on the top of the borrowing market.

You can view the borrowing APY/Interest here, also including the borrowing balance and borrowing limit percentage.

The formula used to calculate the percentage of borrowing is as follows

totalBorrowedlBalance = sum(BorrowBalance + accruedInterest) * priceInUSD
totalCollateralBalance = sum(supplyAssetBalance + accruedInterest) * CollateralFactor * priceInUSD
percentage =  totalBorrowedlBalance / totalCollateralBalance

Liquidation

Every user has a health value in Lendland, which can be calculated as follows

health_value = totalBorrowedlBalance / (totalCollateralBalance * 0.8)

When health value is less than 1, liquidation happens. Every user can liquidate accounts with a health value less than 1 by calling the smart contract.

Liquidation does not liquidate all of the user’s assets, but only a part of the assets, so that the user’s health value is greater than 1. As a return for liquidation, the liquidator will get the collateral assets of the liquidated account at a preferential price which is usually 10%-20% off.

If you want to avoid being liquidated, you need to supply more assets in time to make the health value greater than 1.

Lendland plans to design a Liquidation Pool to share the interest of Liquidation to the accounts who provide assets to the clearing pool. Before it is implemented, we have implemented a Liquidation service to liquidate all accounts that have not been liquidated in time.