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FIR Markets

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General concepts​

On FIR markets, borrowers can mint USG against productive collateral, such as Curve Finance LP tokens or Pendle PTs. On these markets, a fixed interest rate is charged immediately, and is materialized for borrowers by an always-increasing debt. If the collateral produces liquid rewards, 90% of these rewards are streamed back to borrowers, as the protocol applies a 10% fee. No progressive rewards deduction is applied on FIR markets. Unlike in HEC and LEC markets, the interest rate in FIR markets doesn’t fluctuate with the price of USG; it remains constant.
The fixed interest rate can vary across FIR markets, depending on the collateral’s nature. Additionally, following a DAO vote, the rate can be adjusted, and an FIR market can become an HEC or LEC market (and vice versa).
Following a significant and sustained depeg of USG, an FIR market will be converted into an HEC or LEC market to encourage borrowers to repay. It is your responsibility to monitor your loan.
To summarize, on FIR markets:
  • Interest starts accruing immediately when a loan is created;
  • If the collateral produces liquid rewards, 90% of these rewards are streamed back to borrowers;
  • The interest rate is fixed;
  • An FIR market will be converted into an HEC or LEC market if USG depegs significantly.

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Financial flows​

The figure below shows the financial flows on FIR markets. test