Auctions
FOR KEEPERS, NOT FOR BORROWERSA backstop, not something you use. If a loan ever grows too large against the bonds behind it, those bonds are sold to repay the lenders, and anything left over goes back to the borrower.
- Step 1: LOT OPENS
The whole position is auctioned as a single lot.
- Step 2: PRICE FALLS
The price decays linearly from 100% of NAV to a floor of 68%, over 6 hours.
- Step 3: IF SOMEONE BIDS
The winner pays USDC for the whole lot, the debt is repaid, and the surplus returns to the borrower. A winner DexFi has not whitelisted keeps bonds it can stake, deposit and borrow against, but cannot sell them peer to peer, because DexFi's whitelist gates every transfer.
- Step 4: IF NOBODY BIDS
An unfilled lot falls back to DexFi manual redemption, in a workout queue. Before that, for up to 48 hours from when it first opened, a lapsed lot can be restarted at the current NAV.
- Step 5: AFTER A WORKOUT
Repaying a workout in full closes the loan, but the bonds return only when the operator releases the lot, and no deadline binds that. A workout left unpaid can be forced closed by anyone after 14 days, and the debt still owed is written down as a loss; that deadline is on the debt, not on the bonds.
SHOW ME WHAT A LIVE LOT LOOKS LIKEILLUSTRATIVE · NOT FROM CHAIN
An invented auction with a decaying price and a bid button, so the shape of a live lot is visible without anything on this page pretending one exists. The bid path is not built yet either way.
Price falls linearly until someone bids. Unfilled auctions fall back to DexFi manual redemption (workout queue).
If it sells, the price repays the debt first, then the 5% liquidation penalty on that debt, and anything left goes back to the borrower. A price that covers the debt but not the penalty leaves the penalty short, not the lenders. Only a price below the debt itself leaves a shortfall, and that is written off against the insurance fund first and the lenders after it.