# How it Works

There are a couple of ways you can start your Feeder Finance P2P Lending journey, let's start with walking through the lending process

{% tabs %}
{% tab title="Start Here" %}

#### Head over to the 'Lending' menu on the header

![Feeder Finance Homepage](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FKJuID9TwZ62ZRlMKXzmC%2F1.jpg?alt=media\&token=62c227b0-d646-4ecc-ac94-c79ee55357ad)
{% endtab %}

{% tab title="Lending DApp" %}

#### You'll arrive at the main Lending page where you'll find the following things:

![Feeder Finance Lending Protocol](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2F6uLRZmCHYWGMKqn71XHh%2F2.jpg?alt=media\&token=d83c0d91-731b-4531-81d2-4c3c4599a091)

1. **Borrow/Lend Switch** - Switch between creating an offer to "Borrow" or to "Lend"; essentially asking what are you looking to do, borrow or lend
2. **Filter/Sort** - Filter between networks, collateral, preferred assets to borrow/lend, loan status, and sort.
3. **Create Offer** - Whether you are on the Borrow or Lend section, Create Offer allows you to create an offer to either borrow or lend; we'll get to this.
4. **Deal List** - Select from a list of deals or look through matched deals for reference
5. **Stats** - Creating Offers or even bidding for deals requires some thinking about what is fair; a reference to that could be to look at what others have done.

Now that you know your way around, you have a couple decision to make:

1. Are you a deal *Maker* or *Taker* and the difference is a decision whether you'll 'Create Offer' for others to bid on, or bid on others' deals.
   1. Maker: Create an **Offer**
   2. Taker: Create a **Bid**
2. Are you planning to Borrow or Lend?
   1. Borrow: **Create 'Borrow' Offer** or head to 'Lend' and **Bid on 'Lend' Offer**
   2. Lend: **Create a 'Lend' Offer** or head to 'Borrow' and **Bid on 'Borrow' Offer**

**The next two tabs outline how to 'Create Offer' or 'Create Bid'**
{% endtab %}

{% tab title="Create Offers" %}

#### Recall that there are two types of Offers: 1) Offer to 'Borrow' and 2) Offer to 'Lend'.

To recap: 

An **Offer to 'Borrow'** is for users who want to collateralize their token and take out a loan ie.: want to borrow some liquidity.  

An **Offer to 'Lend'** is for users who want to lend out liquidity secured by borrowers that collateralize tokens for security.

Now let's look at the process of each one:

### Borrow Offer

1\. Click 'Create Offer'

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FTDjZQQTnssVWRm7EXDE6%2F3.jpg?alt=media\&token=ffb48208-addf-4f00-aeda-c730dff85efe)

2\. Select the Token You Want to Collateralize

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FXiQltWboHwEh9ZSS94A3%2F4.jpg?alt=media\&token=d59fc6a6-80cf-461a-bd62-07532f233fc4)

3\. Input Collateral Amount

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FpuVERMdrAvE2atSSLkKS%2F5.jpg?alt=media\&token=05055a5f-aa5c-4683-a350-d9da29ce0afc)

{% hint style="info" %}
This is the amount of token you want to collateralize against the loan you wish to take out
{% endhint %}

4\. Input Offer Title and Offer Description (Optional)

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2F16iK1DBg0Xnki9FOZePg%2F6.jpg?alt=media\&token=40675e72-13e1-47b9-b329-bdd14ce0b44d)

{% hint style="info" %}
This helps you indicate your preference or risk tolerance. A title like "FTM-GEIST for any Stablecoin" tells lenders you're hoping to borrow stablecoins with FTM-GEIST as Collateral. A description such as "Willing to go up to 35% LTV if the lending duration is beyond 30 days" would indicate you may be open to flexing the LTV from perhaps a preferred of 50% to 35% if the lender was open to longer-duration loans.
{% endhint %}

5\. Input 'Preferred' Terms of the Loan

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2Ff2wo0bTSHmOx2mWPvHyV%2F7.jpg?alt=media\&token=618ad496-f115-4eb1-a793-f22a00ec0527)

{% hint style="info" %}
Three terms are set for each loan

1\) **APR**: The interest you prefer to pay as a borrower (annualized). For instance, a loan of $100 paying 52% APR would cost the borrower $1 per week in interest; calculation: 52%/52 weeks = 1%/week, 1% of $100 = $1.

2\) **LTV**: Loan-to-Value, which indicates how much in collateral value you are willing to put up against the value of the loan. The lower the LTV, the more collateral you have to put in. For instance, 50% LTV means you put up $100 for a $50 loan.

3\) **Duration**: The unit of input is days but could be fractional. A 0.5 -day loan is a loan for 12 hours for instance. There are no limitations short/long but the borrower needs to repay **before** the term ends or collaterals could be liquidated by the lender.
{% endhint %}

{% hint style="warning" %}
Refer to our 'Lending Terms Consideration' link below for more.
{% endhint %}

{% content-ref url="lending-terms-considerations" %}
[lending-terms-considerations](https://docs.feeder.finance/products-and-services/peer-to-peer-lending/lending-terms-considerations)
{% endcontent-ref %}

6\. Review the Offer Summary

\[Pending] 

### Lend Offer

1\. Click 'Create Offer'

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FqAs671xhDgrDEnUXznjT%2F8.jpg?alt=media\&token=f7978d90-a182-49e5-9de1-26c0783020c0)

2\. Select the Token You Want to Lend

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FLkNXmIInzvLxYkcBFGB4%2F9.jpg?alt=media\&token=dd133831-ede6-434a-b328-42e221bc94c6)

3\. Input Amount You Wish to Lend

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FQ3cp9VSO7qKIJTSsu0v8%2F10.jpg?alt=media\&token=7ac264e8-e1cb-44e8-bfc6-0be32dafc84a)

4\. Input Offer Title and Offer Description (Optional)

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FvCQrfvCMXBvkQ2u2JPsb%2F11.jpg?alt=media\&token=9d267194-3fea-41ed-ba77-76ee51d898e7)

{% hint style="info" %}
This helps you indicate your preference or risk tolerance. A title like "USDC for Mid-Cap LPs" tells borrowers you're willing to accept mid-cap project's LP tokens in exchange for lending USDC. A description such as "Willing to do higher on LTV of up to 55% for shorter-term loans" would indicate you may be open to flexing the LTV from perhaps a preferred of 40% to 55% if the borrower was open to shorter-duration loans.
{% endhint %}

5\. Input 'Preferred' Terms of the Loan

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FOLyEqBlND5BZmKLCIilx%2F12.jpg?alt=media\&token=e13fada9-0303-4e4b-8e0c-862eb7e7a7a8)

{% hint style="info" %}
Three terms are set for each loan

1\) **APR**: The interest you prefer to receive as a lender (annualized). For instance, a loan of $100 paying 52% APR would pay the lender $1 per week in interest; calculation: 52%/52 weeks = 1%/week, 1% of $100 = $1.

2\) **LTV**: Loan-to-Value, which indicates how much in collateral value you are willing to accept against the value of your loan. The lower the LTV, the more collateral the borrower has to put in. For instance, 50% LTV means she puts up $100 for a $50 loan.

3\) **Duration**: The unit of input is days but could be fractional. A 0.5 -day loan is a loan for 12 hours for instance. There are no limitations short/long but the borrower needs to repay **before** the term ends or collaterals could be liquidated by the lender.
{% endhint %}

{% hint style="info" %}
Refer to our 'Lending Terms Consideration' link below for mo
{% endhint %}

{% content-ref url="lending-terms-considerations" %}
[lending-terms-considerations](https://docs.feeder.finance/products-and-services/peer-to-peer-lending/lending-terms-considerations)
{% endcontent-ref %}

6\. Review the Order Summary

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2Fjah6zHn81XjVEe5H1MDB%2F13.jpg?alt=media\&token=b0271b8a-89b6-4917-b0c8-0edbb089802a)

{% hint style="info" %}
Review the terms to make sure they are consistent with your expectations; see the following example:

1. Loan Offer: You are 100 USDC worth approx. $100
2. Bid Collateral Value: You expect 50% LTV from the borrower, so $200 worth of collaterals
3. Est. Interest: The estimated amount of interest you'll earn based on your preferred terms; approx. $0.7671
4. Loan Duration: The length of the loan you preferred; 7 days
   {% endhint %}
   {% endtab %}

{% tab title="Create Bids" %}

#### Recall that there are two types of Offers: 1) Offer to 'Borrow' and 2) Offer to 'Lend'.

To recap: 

An **Offer to 'Borrow'** is for users who want to collateralize their token and take out a loan ie.: want to borrow some liquidity.  

An **Offer to 'Lend'** is for users who want to lend out liquidity secured by borrowers that collateralize tokens for security.

By creating bids, you are bidding on these offers by telling the borrower or lender what your terms are for either lending your funds or borrowing funds from them.

Now let's look at the process of each one:

### Borrow Bids

1\. Select the Offer You Want to Bid On

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FP1U7qw3RJJ9M9EENuOdV%2F14.jpg?alt=media\&token=640b2978-ed75-45da-9995-be14b20be30e)

{% hint style="info" %}
You will find that the preferred terms figures are a useful indication of whether or not you are going to get a deal done. If you think you can come close or even match the preferred terms, your bid is likely to be accepted.
{% endhint %}

2\. Review The Offer Preferred Terms & Click 'Create Bid'

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FiF8Sv7ml6U1nsNEfv4Kz%2F15.jpg?alt=media\&token=78275ca9-069a-4132-bae0-fb9424d39a84)

{% hint style="info" %}
On the top right of the offer page, you'll see all terms that the Borrower is looking for. Specifically:

She's looking to pay around 35% APR for a 7 days loan and is willing to offer 50% LTV or 2x in collateral versus the loan amount.

You don't have to match it, but it is likely that you'll need to come close.

Once you're ready, click 'Create Bid'
{% endhint %}

3\. Select The Asset You Want to Lend

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FKVh81nhJZ6rLbsDcnhQl%2F16.jpg?alt=media\&token=c66a3f52-64c5-41d3-9f3a-49dcdfac024d)

4\.  Input the Amount You Want to Lend

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FO33CzL0ti4erXMP0xmza%2F17.jpg?alt=media\&token=e74b7c0c-70fc-4319-87a6-56c7dc0292c2)

{% hint style="info" %}
This is the amount of selected token you wish to lend to the borrower
{% endhint %}

5\. Input the Term of the Loan

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2F26Zg5Z5Ddy3DKoRPdISG%2F18.jpg?alt=media\&token=e6bfb162-19bf-46df-b400-1708da76b041)

{% hint style="info" %}
Two terms need to be set by the bidder

1\) **APR**: The interest you want to receive as a lender (annualized). For instance, a loan of $100 receiving 52% APR would yield $1 per week in interest to the lender; calculation: 52%/52 weeks = 1%/week, 1% of $100 = $1.

2\) **Duration**: The unit of input is days but could be fractional. A 0.5 -day loan is a loan for 12 hours for instance. There are no limitations short/long but the borrower needs to repay **before** the term ends or collaterals could be liquidated by the lender.
{% endhint %}

{% hint style="warning" %}
Refer to our 'Lending Terms Consideration' link below for more.
{% endhint %}

{% content-ref url="lending-terms-considerations" %}
[lending-terms-considerations](https://docs.feeder.finance/products-and-services/peer-to-peer-lending/lending-terms-considerations)
{% endcontent-ref %}

6\. Select Whether to Use Pro-Rata Interests or Allow Liquidator

{% hint style="info" %}
**Pro-Rata Interests:** When turned on, interest due is proportionate to the duration of the loan at repayment. When turned off, the interest is fixed by the loan duration regardless of the repayment timing.

**Allow Liquidator:** When turned on, you allow Liquidators to come and settle the loan for you when it is due. The liquidator provides you with your principal plus interest, doing so, the Liquidator collects the borrower's collateral.
{% endhint %}

7\. Review the Bid Summary

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FPDTkkU1NimEr4uaRTpaj%2F19.jpg?alt=media\&token=02732be1-fbb2-4b27-b0ea-0815d1657b4d)

{% hint style="info" %}
The summary provides an overview of your bid and the borrower's preferred terms. This will help you adjust or make decisions about your bid to the borrower.
{% endhint %}

###

### Lend Bids

1\. Select the Offer You Want to Bid On

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2F1BZcNpHFj6NJhFlqoPMK%2F20.jpg?alt=media\&token=b8509aca-9870-4d83-b37b-fd7eb8c2dfe0)

{% hint style="warning" %}
You will find that the preferred terms figures are a useful indication of whether or not you are going to get a deal done. If you think you can come close or even match the preferred terms, your bid is likely to be accepted.
{% endhint %}

2\. Review The Offer Preferred Terms & Click 'Create Bid'

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FXju4pjqJxqJ49J36Vkru%2F21.jpg?alt=media\&token=f6cf0a78-f053-47d1-a813-5a9f326cce1d)

{% hint style="info" %}
On the top right of the offer page, you'll see all terms that the Lender is looking for. Specifically:

She's looking to lend at around 30% APR for 5 days and is willing to accept 50% LTV or 2x in collateral versus the loan amount.

You don't have to match it, but it is likely that you'll need to come.

Once you're ready, click 'Create Bid'
{% endhint %}

3\. Select The Asset You Want to Collateralize for the Loan

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2F2EaoqL8KnOjTMNRA09Qk%2F22.jpg?alt=media\&token=4edc52e4-194d-4f94-94ac-317130dee970)

4\. Input the Amount You Want to Collateralize

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FSfuiCpcLGpxkrhH9zK5O%2F23.jpg?alt=media\&token=74c5e14a-0017-4b7f-9561-b4e1937f287b)

5\. Input the Term of the Loan

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FChfzX1nj0x2tpzh2Knuh%2F24.jpg?alt=media\&token=8f1affee-03d5-4078-afc2-9348102fcdf6)

{% hint style="info" %}
Two terms need to be set by the bidder

1\) **APR**: The interest you want to pay to the lender (annualized). For instance, a loan of $100 at 52% APR would cost $1 per week in interest to the borrower; calculation: 52%/52 weeks = 1%/week, 1% of $100 = $1.

2\) **Duration**: The unit of input is days but could be fractional. A 0.5 -day loan is a loan for 12 hours for instance. There are no limitations short/long but the borrower needs to repay **before** the term ends or collaterals could be liquidated by the lender.
{% endhint %}

{% hint style="warning" %}
Refer to our 'Lending Terms Consideration' link below for more.
{% endhint %}

{% content-ref url="lending-terms-considerations" %}
[lending-terms-considerations](https://docs.feeder.finance/products-and-services/peer-to-peer-lending/lending-terms-considerations)
{% endcontent-ref %}

6\. Select Whether to Use Pro-Rata Interests or Allow Liquidator

{% hint style="info" %}
**Pro-Rata Interests:** When turned on, interest due is proportionate to the duration of the loan at repayment. When turned off, the interest is fixed by the loan duration regardless of the repayment timing.

**Allow Liquidator:** When turned on, you allow Liquidators to come and settle the loan for you when it is due. The liquidator provides you with your principal plus interest, doing so, the Liquidator collects the borrower's collateral.
{% endhint %}

7\. Review the Bid Summary

![](https://477838308-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYOJi0paschHKe-LQlk%2Fuploads%2FTq1QjWkBPHi2fZ1IbaoR%2F25.jpg?alt=media\&token=2ecca381-9936-4366-953a-32e74b7524e8)

{% hint style="info" %}
The summary provides an overview of your bid and the lender's preferred terms. This will help you adjust or make decisions about your bid to the
{% endhint %}
{% endtab %}
{% endtabs %}

### Fees

The fee structure of Feeder Finance is very simple:

* **Borrowers** do not pay any fees
* **Lenders** pay a 0.3% fee off the interest