How to Lend, Exit, and Collect
Lending in Collar is a swap between a lender's assets (WANT tokens) and a borrower's COLL tokens. COLL tokens give the lender the right to collect the repaid loan or the defaulted collateral after the expiry of the loan, or they can be swapped back before expiry to exit the loan early. In return for the use of their assets during the loan term, lenders are paid interest upfront: they receive a greater number of COLL tokens than the number of WANT tokens they provide when they swap.
This page describes the process of lending only, which means to swap an asset for COLL tokens. If you wish to instead lend and also provide liquidity to increase your yield, you can skip directly to How to Add/Remove Liquidity.
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Lending Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: On the "SWAP" tab, select the "Lend" page. Then use the "Pair Selector" to choose the collateral that will secure the loan (COLL) and your asset to lend (WANT). Step 4: Make a note of the "Expiry" of the loan. This is the date after which you can collect on the loan (redeem COLL tokens for assets). You can use the "NewRound" toggle to switch to a later expiry date if you wish. Step 5: If they are not yet approved, click "Approve" and approve your tokens for trading. Step 6: Enter the amount of WANT tokens you wish to deposit or click "MAX". The amount of COLL tokens you will receive will be shown. The difference between the COLL amount and WANT amount is the interest you earn for the loan. Step 7: Once you are ready, click "LEND". Step 8: Once the transaction is complete, you will receive your COLL tokens and you can view them in the Collar dashboard.
If you hold the COLL tokens until the expiry of the loan, you will be able to redeem each for its underlying assets and will earn the originally quoted APY for the loan. If you exit the loan early by swapping back to WANT tokens before expiry, you give up part of the interest, in an amount determined by the price of COLL at the time of the swap.
Exit Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: On the "SWAP" tab, select the "Exit" page. Then use the "Pair Selector" to choose the collateral that secures your loan (COLL) and the asset you lent (WANT). Step 4: Enter the amount of COLL tokens to swap or click "MAX". The amount of WANT tokens you will receive will be shown. Step 5: Once you are ready, click "Exit". Step 6: Once the transaction is complete, you will receive your WANT tokens in your wallet automatically.
After the loan has expired, it's time to collect. Collecting on your loan can only be done from the "Pro" page of the Collar app. You have 6 months from the time the loan expires to collect on your loan; after this deadline passes you forfeit the right to collect your assets (please see CIP2).
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Collect Steps
Step 1: Go to collar.org and enter the app. Step 2: Connect your wallet to Collar (make sure your wallet is set to the Ethereum Mainnet and you have some ETH to cover gas fees). Step 3: In the app menu, enter "Pro". Step 4: On this page you can view all active and recently expired lending pools. Find the expired pool you wish to collect from and expand its menu by clicking the "+" icon. Step 5: Open the "SWAP" tab. Click "Approve" and approve your tokens for trading. Enter the amount of COLL tokens to swap or click "MAX". The amount of BOND and WANT tokens you will receive will be shown. Step 6: Once you are ready, click "Swap". Step 7: Once the transaction is complete, you will receive your BOND and WANT tokens in your wallet automatically.
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