Credit Lines

The Credit Lines are smart contracts allowing anyone to borrow jFIATs against yield-bearing collateral.

⚠️ The Credit Lines have been reviewed and audited internally but have not been audited by an independent auditor.

Borrowing and repaying

Users can borrow jFIATs from the protocol against approved collateral, for a fixed origination fee of 0.5%.

Each collateral has a "borrowing power" (BP) which determines the size of the credit line (CL) the user can open.


WETH has a BP of 80%.

A user deposits 1 WETH ($2,000), which opens a CL of $1,600.

The user decides to use half of their CL and borrows $800 of jCAD.

A origination fee of $800 * 0.25% = $2 is paid in WETH to the protocol.

The BP varies with the volatility and liquidity of the collateral, as well as with the risks it bears. The higher the volatility, the lower the liquidity, and/or the riskier the asset is, the less one could borrow against it. We are re-using the parameters used by Aave.

Users can retrieve part or all their collateral by repaying their loan. There is no repayment fee.

Interest on the collateral

The protocol lends the collateral deposited by users on third-party money markets, and the interest is shared between the borrower and the protocol’s treasury, as per a ratio voted by the governance.

The current Credit Line contracts (v2) do not support this feature. It will be part of the Credit Line v3 contracts.


The health ratio (HR) is the ratio between the collateral value and the loan's value.


A user deposits $2,000 of WBTC and borrows $1,000 of jEUR.

Their HR is 2,000 / 1,000 = 200%.

The borrower must maintain their HR above the liquidation threshold (set by the governance). If the HR drops below the liquidation threshold, the borrower faces liquidation.

The liquidator must repay part or all of the loan on behalf of the user. As a reward, they receive the collateral covering the loan and a percentage of the remaining collateral, called the penalty fee, and set by the governance.


BTC/EUR rate is 20,000, and WBTC‘s BP is 70% with a liquidation penalty fee of 10%.

A user deposits 1 WBTC (€20,000), which opens for them a CL of €14,000.

The user uses all of it and borrows 14,000 jEUR.

The HR of their loan is 20,000 / 14,000 = 142%.

The liquidation threshold is 125%.

If the BTC/EUR rate goes down to €17,000, the loan would have an HR of 17,000 / 14,000 = 121%.

If the user does not add more collateral or repay part or all of their loan, it will be eligible for liquidation.

A liquidator must acquire 14,000 jEUR (₿0.82) to liquidate the position. The liquidator will get back 14,000 / 17,000 = 0.82 WBTC (14,000 Euros worth of collateral that covers the loan) and a penalty fee of (1 - 0.84) * 10% = 0.018 WBTC (10% of the remaining collateral). The liquidator realises a prefit of 0.018 / 0.82 = 2.2%.

Liquidators can acquire the jFIATs by buying or borrowing them (with or without flash loans) on primary or secondary markets.

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