3. Lending & Borrowing Mechanisms
Edma integrates DeFi-based lending and borrowing to provide energy producers, businesses, and investors with liquidity solutions without the need to sell assets. By leveraging CLE and EDM as collateral, Edma ensures a stable and secure borrowing environment within its decentralized finance ecosystem.
Key Components of Lending & Borrowing
1. Collateralized Lending with CLE & EDM
CLE and EDM holders can lock their tokens as collateral to secure loans.
Ensures access to capital without liquidating holdings, maintaining long-term investment potential.
Loan amounts are determined by Loan-to-Value (LTV) ratios, balancing risk and accessibility.
2. Liquidity-Backed Lending Pools
Lending pools are funded by staked CLE and EDM, ensuring sustainable liquidity.
Enables energy producers and businesses to access funding for renewable projects.
Reduces reliance on traditional financing by offering decentralized credit solutions.
3. Interest-Based Returns for Lenders
Lenders deposit CLE or EDM into liquidity pools to earn yield.
Borrowers pay interest on loans, generating passive income for liquidity providers.
Interest rates are dynamically adjusted based on supply, demand, and risk factors.
4. Smart Contract Automation & Risk Management
Smart contracts automate loan issuance, repayments, and liquidations.
Borrowers must maintain sufficient collateral to avoid liquidation penalties.
Real-time risk monitoring and price oracles ensure stability and transparency.
How Lending & Borrowing Works in Edma
Users deposit CLE or EDM into lending pools, providing liquidity to the ecosystem.
Borrowers lock CLE or EDM as collateral and receive loans in EDUSD or other stable assets.
Smart contracts manage loan terms, interest accrual, and repayment schedules.
Lenders earn passive income, while borrowers gain capital for energy projects.
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