Can I always withdraw lent out funds or are there

Question

MultiversX - Community

Thomas

Can I always withdraw lent out funds or are there

any scenarios where I can't withdraw them?

#blockchain #cryptocurrency #elrond #english

0

13.07.2023

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Ahmed | Hatom Protocol · Accepted Answer

To answer your question we need to separate the two protocols: * For Liquid Staking, you are able to unstake your assets at any point in time, you can Unstake your sEGLD and receive the equivalent in EGLD after the 10 days cooldown period. *For the Lending Protocol, the assets are supplied in a pool from where borrowers are able to take loans in an over-collateralized manner. In case the borrowers have taken a loan of all that assets inside the lending protocol, suppliers would need to wait for the borrowers to repay their loan to be able to withdraw their assets. BUT HERE we are talking about an edge case scenario. The money market works with a utilization rate model, which means that if borrowers are trying to take a loan of more than 45% of liquidity available in it, the interest rate will start accruing exponentially, borrowers would be paying too much interest and would be incentivized to repay their loan to put more liquidity in the pool. Suppliers will be incentivized to put more liquidity in the pool too as the Supply APY would have also increased a lot. To summarize, the money markets inside the lending protocol have been conceived in a way that there will always be liquidity available in the lending protocol to be withdrawn by the suppliers.

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Can I always withdraw lent out funds or are there

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