And if you still feel puzzled about what exactly a smart contract does, we’re here to solve this issue and explain to you every detail:
🔘 Creating a pool
The contract transmits pool info: borrower, amount, period. We create a new pool contract with defined terms (amount, interest rate, period). The contract is immutable and public. It also sets rules like the maximum Loan-to-Value (LTV) ratio (e.g., 50%), meaning the required collateral must be worth double the loan.
🔘 Funding
You, as an investor, send funds to the one smart contract (fundraiser: 0xf435A133D6cDCb81061F18a4763560f9931DB57D), which stores them until the period ends. The contract holds these funds in escrow.
🔘 Collateral Locking
As you already know, every loan on our platform is backed by real collateral (e.g., machinery, vehicles), and before a project is listed, the borrower’s collateral is professionally appraised. This independently verified value is then recorded on the blockchain.
🔘 Loan Disbursement
Once the pool is fully funded and collateral is securely locked and verified, the contract automatically releases the loan amount to the borrower. This is a single, immutable transaction.
🔘 Repayment
The borrower sends repayment (principal + interest) to the contract. The contract automatically calculates accrued interest down to the second, distributes a portion as protocol fees, and upon full repayment, unlocks the collateral for the borrower to withdraw.
🔘 Withdrawal of Earnings
Lenders can call a withdraw function at any time after repayment. The contract automatically calculates their share of the principal + interest (minus fees) and transfers it. This is permissionless and does not require our platform to act.
🔘 Risk Management. 24/7 Monitoring
The contract constantly monitors the repayment schedule, and investor activity—everything you can see on a project’s page. You can check all addresses that put money into a specific pool and see the exact addresses that received repayments.
That’s quite a read, but our main goal here was to explain everything to you, so you understand how the smart contract works on 8lends.
❗️ Remember: the smart contract is your main guard, and you need to know how it works before making any investment!
Got any more questions? Leave them in the comments! 👇