What is a “Maturity Date” and how is it related to the lock-up period?
The maturity date is the date on which the collateral is unlocked and ready to be withdrawn. Before the maturity date, the collateral is locked and held in the smart contract. Once the market has reached its maturity, any outstanding borrow balance should be paid off. The maximum period the market creator could set up is 10 years.
For example, if a market creator selects a 12-month lock-up period, the system will automatically calculate a maturity date based on the market creation date. HODLers who deposited the collateral token can only withdraw after 12 months.
Maturity dates are only applicable to the base tokens (collateral tokens). Stablecoins are not controlled by the maturity date. Stablecoins depositors can deposit and withdraw stablecoins anytime.
What actions can be taken before the maturity date?
Before the maturity date, the collateral is locked and held in the smart contract and cannot be withdrawn. However, users can deposit the collateral token anytime. Stablecoins are not controlled by the maturity date. Users can also deposit and withdraw stablecoins anytime.
Do I have to set up a Maturity Date?
There are options available to create a market without a lock-up period. Simply choose "None" in the Maturity Date section. In this case, your pool functions just like a savings pool and it is open for users to deposit and withdraw anytime for any tokens.
What happens on the Maturity Date?
Any borrowed balance is due to be paid back to the depositors on the maturity date. If the borrowing balance is not paid off, and the loan-to-value ratio is below 95% the underlying collateral will be liquidated and paid to the depositors within 7 days. If the loan-to-value ratio is above 95%, the settlement period will be extended to 30 days, and looking for a liquidation opportunity. After 30 days, if the outstanding loan amount still could not be settled the position would be categorized as a bad debt collection account and could be partially or fully covered by the DeFiner insurance pool.
What happens after the Maturity Date?
Once reached the Maturity Date, the HODLer Market becomes a regular lending pool. Users can withdraw any available tokens in the pool. If the community wants to lock up the token again, they can propose a new maturity date. No new markets are needed.
A new lock-up period and maturity date can be proposed through the DeFiner DAO voting process. Once the newly proposed maturity date is successfully approved, users have a 7 - day window to withdraw tokens if they do not want to lock up their tokens anymore.
Maturity Date: The maturity date is used to set a lock-up period for the base token and determine when the loan is due.