Getting Started with Borrowing and Lending Platform (credit.rwa.io)

Welcome to the help centre for RWA.io Credit (credit.rwa.io), a decentralized lending and borrowing platform designed for real-world asset (RWA) projects and their tokens. Whether you're a project team using tokenized assets or a user lending stablecoins to earn yield, this guide explains how the system works in detail, from setup to liquidation.

What is RWA.io Credit?

RWA.io Credit enables project teams to borrow $USDC against their on-chain tokens and allows users to lend $USDC to earn a yield. The platform operates on Ethereum and supports EVM-compatible tokens that have sufficient secondary market liquidity. It is built on secure, non-custodial smart contracts and supports both permissionless and permissioned pool types.

Who Is It For?

  • Borrowers: Projects with on-chain tokens (including utility tokens, governance tokens, or tokenized real-world assets) can use them as collateral to borrow $USDC.
  • Lenders: Individuals or institutions can supply $USDC to lending pools to earn interest while supporting the liquidity needs of RWA projects.

Core Concepts Explained

  • Loan-to-Value (LTV): The maximum percentage of your collateral's value that you can borrow. A 50% LTV means a $10,000 token deposit allows for $5,000 borrowing.

  • Collateral: The project tokens deposited to secure a loan.

  • Healthy / At Risk: A loan is marked "Healthy" when it is well-collateralized. If the collateral's value drops close to the liquidation threshold, the status changes to "At Risk," signaling that you should add more collateral or repay a portion of the loan.
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  • Liquidation: If your collateral value drops below the required threshold or the loan is not repaid before the term ends, the collateral may be sold to repay the lenders.

Liquidation: If collateral value drops or the loan isn't repaid before expiry, the collateral can be sold to repay lenders.

What You Need to Use the Platform

  • A Web3 wallet (e.g., MetaMask or a WalletConnect-compatible wallet).
  • $ETH for gas fees on the Ethereum network.
  • Either:
    • Project tokens to use as collateral.
    • $USDC to lend.

    • Borrowing Step-by-Step

    1. Connect your wallet at credit.rwa.io.
    2. Select a pool that is compatible with your token.
    3. Deposit your project tokens as collateral.
    4. Borrow $USDC up to the allowed loan-to-value (LTV) ratio.
    5. Monitor your loan health, displayed as either "Healthy" or "At Risk."
    6. Repay your loan before the term expires to reclaim your collateral.

    Lending Step-by-Step

    1. Connect your wallet.
    2. Choose a pool accepting $USDC deposits.
    3. Deposit $USDC to begin earning yield.
    4. Withdraw your $USDC and earned interest at any time, subject to pool terms and available liquidity.

    Liquidation and Buyer of Last Resort

    If a borrower’s position becomes “At Risk,” anyone can trigger a liquidation. The system sells the collateral to cover the loan and return funds to lenders.

    For tokens without liquid markets (such as tokenized real estate or security tokens), the issuer must agree to act as a Buyer of Last Resort (BLR). This means:

  • If the collateral cannot be sold on-chain at a fair price during liquidation, the issuer is obligated to buy it back at a pre-agreed fallback value.
  • This mechanism protects lenders and mitigates the risk of holding illiquid assets.

    • Pool Mechanics and Customization

    Each pool has unique, fixed parameters:

    • A fixed term (e.g., 90 days).
    • A target Annual Percentage Rate (APR) for lenders.
    • A maximum Loan-to-Value (LTV) ratio for borrowers.

    Project teams can request a custom pool with specific terms by:

    • Providing a minimum of $10,000 in initial liquidity.
    • Paying a one-time configuration fee of $500.
    • Requesting specific terms, such as the target APR or collateralization limits.

    Note: Post-beta, pools will be eligible for revenue sharing from platform fees.

    Pool End Dates and Lifecycle

    Pools operate for a defined period and have a fixed end date. Two weeks before a pool is scheduled to close:

    • Borrowers will receive notifications to repay their outstanding loans.
    • Lenders can begin withdrawing their principal and earned interest as loans are repaid.
    • To ensure continuity, liquidity from a closing pool may be rolled over into a new pool

    Fees and Incentives

  • Beta Phase:
    • Lending and borrowing are currently fee-free.
    • A 5% administrative fee applies to the collateral value during a liquidation event to cover manual processing costs.
  • Post-Beta:
    • A fee spread model will be introduced. For example, borrowers might pay 10% interest while lenders earn 8%, with the 2% difference going to the platform.

    • Token Eligibility and Multichain Support

    For Permissionless Pools: To be eligible, tokens must:

    • Be an ERC-20 token on an EVM-compatible chain.
    • Have verifiable and sufficient liquidity on secondary markets.
    • Be routable through major decentralized exchanges (DEXs)

    For Permissioned Pools (security tokens, illiquid RWAs):

    • These pools are required for assets without deep on-chain liquidity.
    • Issuers must contractually commit to the Buyer of Last Resort process (see above)
    • Additional compliance conditions may apply

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