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Liquidity Pool Option

1. Overview

The Liquidity Pool Option lets users stake crypto as collateral and instantly access USD credit for real-world spending — without selling their assets.

Loompay’s liquidity engine automatically manages LTV ratios, risk thresholds, and liquidation safety via real-time on-chain monitoring.

💡 In short: You stake crypto, Loompay gives you USD to spend — safely, instantly, and transparently.

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2. How It Works

  • User selects a supported crypto (e.g., BTC, ETH, SOL).

  • The system calculates a Loan-to-Value (LTV) ratio and displays the available USD credit.

  • USD credit is instantly deposited to the Loompay Wallet/Card.

  • Continuous monitoring ensures collateral safety — if asset value drops below threshold, partial or full liquidation is triggered.

  • User can repay anytime; collateral unlocks automatically upon full repayment.

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Advance Ratios & Liquidation Parameters

Asset
Max LTV
Liquidation Trigger
Liquidation Type
Risk Profile

BTC

60%

>15% price drop

Partial

Stable, high liquidity

ETH

55%

>20% price drop

Partial

Moderate volatility

SOL

50%

>30% price drop

Full

High volatility

Example:

  • Stake 1 BTC ($110,000) → Receive $66,000 credit (LTV 60%)

  • If BTC drops below $93,500 (−15%), auto-liquidation secures your position.

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Funding Source & Capital Safety

Loompay’s credit liquidity comes from two primary sources:

  1. Liquidity Providers (LPs):

    Institutional and retail partners who stake USD stablecoins (USDC/USDT) into the Credit Liquidity Pool (CLP).

  2. Protocol Reserve:

    A dynamic on-chain treasury that absorbs temporary volatility and ensures real-time settlement for user withdrawals and card spend.

💼 All credit advances are backed 1:1 by collateralized assets or liquidity reserves, ensuring system solvency and transparency.

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Fee & Interest Model

Fee Type
Description
Range

Credit Interest (APR)

Dynamic based on asset & market rate

3–7% per year

Liquidation Fee

Applied only upon forced sell

0.5–1%

Early Repayment Fee

None (repay anytime)

0%

Collateral Rebalancing Fee

Optional if user extends collateral

0.25%

Users can choose between:

  • Flexible Borrowing: Pay interest only on used balance.

  • Fixed-Term Staking Credit: Lock for 15–60 days with 0% interest but capped credit limit.

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4. User Benefits

  • 💰 Spend without selling crypto holdings.

  • 🌍 Use USD instantly via Loompay virtual or physical card.

  • 🔄 Auto-repay mechanism: deposits or transfers reduce loan balance automatically.

  • 💸 Earn staking rewards on unborrowed collateral portions.

  • 🔒 Automated liquidation system ensures user safety and pool stability.

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