Universal Creditline

Fixed Term Fixed Rates

Acreditline is a cumtom instrument dedicated to a single borrower entity, and would facilitate fixed-term unsecured lending or loans collateralized with any collateral. A borrower who meet the approval criterion will be able to drawdown from this custom creditline.

Every loan will go through the following protocol

0. Proposal

A borrower submits a proposal for a fixed-term loan and proposes the following information;

1. Principal borrowed
2. Interest to pay
3. Duration of the loan
4. Collateral or credit to be assessed 

The information would be provided as input to the constructor of the new creditline contract, which would be deployed along with the new prediction market when the proposal is submitted.

1. Assessment

During the assessment, as the loan is a fixed term fixed rate instrument, managers will be able to buy longZCB at a price less than 1, and redeem it at a price of 1 when the loan matures. In this scenario a longZCB is akin to a (levered) zero coupon bond.

The initial price of longZCB s determined by the interest proposed by the borrower; the higher the interest proposed the lower the initial price.

2. Approval/Disapproval

When the creditline is approved, the protocol's vault will supply to this creditline contract and the borrower can post collateral to make a drawdown.

How does this differ from the Lendingpool? In a lending pool a borrower would be able to take out a loan instantly, if one of the pools in the protocol supports the collateral/condition of the borrower or the borrower's loan principal is under a threshold. If else, the borrower would have to propose an individual creditline where the managers will assess and buy longZCB on a case-by-case basis