Lending

The Noma protocol’s credit facility is an innovative financial service designed to provide users with capital efficiency and stability. It leverages the protocol’s ETH reserves to issue loans backed by $NOMA collateral at the floor price. This section delves into the technical architecture, mechanisms, and operations of the credit facility, ensuring a comprehensive understanding of its functionality and benefits.

Overview

• 100% Capital Efficiency:
  Loans are emitted with full collateral value at floor price minus service fee
• Paid Upfront:
  An upfront fee is charged, based on the loan amount and duration
• No Liquidations:
  If the loan is not repaid by the expiry date, the collateral is burned
• Duration:
  Loans have a predefined expiry date set by the borrower
• Fee Structure:
  The fee percentage is adjustable based on protocol governance

Contract Logic

A new loan contract is instantiated upon successful collateralization and payment of the service fee.

State Variables:

• collateralAmount The amount of $NOMA collateralized.
• loanAmount The amount of ETH loaned.
• expiryDate The date when the loan expires.
• serviceFee The upfront fee paid by the user.

Functions:

• collateralize(uint256 _amount): Locks $NOMA and initializes the loan contract
• repayLoan(): Allows users to repay the loan and retrieve their collateral
• burnCollateral(): Burns the collateral if the loan is not repaid by the expiry date