Lines of Credit and Use Cases
Why use Lines of Credit on-chain instead of regular term loans?
While initially talking to potential borrowers, it was obvious that fixed term debt is too cumbersome for experimentation in what is still very much a new space. Also, due to the early nature of Treasury Management as a practice and of on-chain credit in general.
We've therefore designed our Line of Credit contract with great flexibility for Borrowers and Lenders without forgetting about security and recourse.
The Line of Credit contract can be considered a first debt 'primitive' upon which we've built the Marketplace. It enables a wide variety of use cases and strategies.
Asset liability mismatches between tokens in your treasury and ongoing Working capital expenses are a huge roadblock to growth.
Fund your product development and community initiatives in stablecoins without ever selling a token.
Access a credit line of stablecoins when you need it to manage peaks and troughs in your working capital