Lending/Borrowing

Lending and borrowing on Enigma operate through smart contracts, where borrowers are required to provide collateral to secure their loans. This collateral ensures that lenders are protected in case borrowers fail to repay the borrowed funds.

One advantage of this system is that it allows users to access additional funds for trading or liquidity provision. Additionally, lenders can earn interest on their deposited funds, providing an opportunity to generate passive income.

However, there are risks associated with lending and borrowing, including the possibility of borrowers defaulting on their loans. In such cases, the collateral provided by the borrower is liquidated to cover the outstanding debt, minimizing the impact on lenders.

On the other hand, if borrowers repay their loans in full and on time, they retrieve their collateral without any penalties. Additionally, borrowers have the flexibility to repay their loans early, reducing the amount of interest paid.

Please note: While we're currently in the testing phase for this feature, please note that the information provided above may be subject to change in the future.

The Enigma Lending/Borrowing feature is currently in development, and we'll be providing more updates soon on our Telegram channel/ Twitter Platform.