5.1.4 Digital Lending

Functional Overview Users can pledge BTC or ETH on the DragonFly platform and borrow 70% of the corresponding value in the form of USDT or TRX. Daily interest must be paid during the loan period, and liquidation or redemption is triggered under certain conditions. The following is the specific mechanism: Pledge and borrow:

Users can pledge BTC or ETH. The smart contract evaluates the value of the pledged assets based on the real-time market price and allows 70% of its value to be borrowed (in the form of USDT or TRX). For example: A user pledges 1 BTC, which is worth 100,000 USDT at the time, and can borrow 70,000 USDT or the equivalent TRX. Interest rate and fees:

Daily interest rate: 1% interest must be paid daily for borrowing (i.e., an annualized interest rate of 365%). Calculation method: Daily interest = loan amount × 1%. For example: If 70,000 USDT is borrowed, the daily interest is 700 USDT; if the loan is for 10 days, the accumulated interest is 7,000 USDT. Liquidation mechanism:

Trigger condition: If the market price of the pledged asset (BTC or ETH) falls to or below the sum of the loan principal and accumulated interest, the platform will automatically liquidate. Liquidation process: The smart contract automatically sells the pledged BTC or ETH to repay the loan principal and interest, and the remaining part (if any) is returned to the user. For example: Pledge 1 BTC, borrow 70,000 USDT, and borrow 5 days with an accumulated interest of 3,500 USDT, with a total of 73,500 USDT. If the BTC price falls to 73,500 USDT, the platform will automatically liquidate, sell 1 BTC to repay 73,500 USDT, and return the remaining value to the user. Redemption mechanism:

Users can redeem the pledged BTC or ETH at any time by returning the loan principal and accumulated interest. For example: 70,000 USDT is lent out for 10 days, and the accumulated interest is 7,000 USDT. The user can redeem 1 BTC by paying 77,000 USDT. After redemption, the pledged assets are instantly unlocked and returned to the user's wallet. Flexibility and monitoring:

Users can view the value of pledged assets, loan amount and interest accumulation in real time through the platform interface. The smart contract has built-in on-chain oracles (such as Chainlink) to provide real-time price data to ensure the accuracy of liquidation and redemption. Ecological role Improve the utilization rate of platform funds, and the funds that earn interest on deposits can be used for lending, increasing the source of income. Ensure system stability through the liquidation mechanism and attract more users to participate in the lending ecosystem.