Lending/Borrowing (Example)
How it works:
Scenario 1 - Successful Loan: Alice wants to borrow 10 ETH to invest in a new DeFi project. She puts up 20 ETH as collateral and borrows the funds through Enigma's lending platform. Alice repays the loan with interest on time. As a result, she gets back her 20 ETH collateral, and the lender earns interest.
Scenario 2 - Early Repayment: Bob borrows 5 BTC to trade in the Enigma's borrow platform. He pays back the loan in full before the due date, reducing the interest he owes. Bob gets his collateral back and saves on interest.
When it fails:
Scenario 1 - Defaulted Loan: Carol borrows 100 DAI for a risky investment that goes bad. She can't repay the loan. The smart contract sells her collateral to cover the debt. Carol loses her collateral, and the lender gets compensated.
Scenario 2 - Insufficient Collateral: Dave borrows 50 ETH but only puts up 25 ETH as collateral. When the value of his collateral drops, it's not enough to cover the loan. The smart contract sells Dave's collateral, but there's still money owed. The lender might lose out in this case.
These examples show how borrowing and lending on Enigma can be helpful, but there's also a risk of losing collateral if loans aren't paid back.
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