Borrowers

By tapping into other lenders’ idle credit power, borrowers on Twyne can boost the Liquidation Loan-to-Value ratio (LLTV) dictated by the underlying lending market. Borrowers can use this extra line of credit in two main ways:

1. Increase their leveraged exposure or boost their maximum loop count

2. Create a safety buffer that protects their loan against liquidations

Example: Twyne’s stETH↔ETH vault allows borrowers to boost their Liquidation LTV from 95% up to 98% and squeeze up to 32 loops, compared to a maximum of 14 loops allowed by the underlying lending market (Euler).

Interest Rate

Borrowers on Twyne pay two interest components:

• The base borrow rate from the lending protocol (borrow APY)

• The CLP Supply Rate (dynamic fee paid to lenders to access their delegated borrowing power)

The CLP Supply Rate is dynamic and grows with protocol utilization. When demand is lower than Twyne’s utilization target, it translates to low CLP supply rates. When demand is higher than Twyne’s utilization target, it leads to a sharp increase in the CLP supply rate.

The CLP supply rate is paid only on the extra credit the borrower reserved, not their total debt. This makes the CLP supply rate a fraction of the typical liquidation costs, and makes the net interest much lower than it seems - even on a steep curve.

Read more details about borrower Interest Rates.