# For Lenders ### How to Fund Loans #### Getting Started as a Lender As a lender, you can earn interest by funding loans on Liquify LoanManager. Here's how to get started:What you need: * A Web3 wallet (like MetaMask) * USDC tokens on your chosen network * Basic understanding of DeFi lending #### How to Fund a Loan #### 1. Browse Available Loans * Look for loans in "Fundraising" state * Check the loan details: collateral, amount needed, interest rate, deadlines * Evaluate the borrower's collateral ratio 2. Choose Your Investment * Decide how much USDC you want to contribute * You can fund any amount - from small to large * Multiple lenders can fund the same loan 3. Fund the Loan * Click "Fund Loan" on your chosen loan * Enter the USDC amount you want to contribute * Approve the transaction in your wallet * Receive LoanShare tokens representing your investment #### Understanding Your Investment LoanShare Tokens: * Each loan gets its own LoanShare token * These tokens represent your stake in the loan * You'll need these tokens to claim your returns later Collateral Protection: * If a borrower defaults, you get their collateral instead of USDC * This protects you from losing your investment * The collateral is distributed proportionally among all lenders #### Tips for Choosing Good Loans Check These Factors: * Collateral Ratio - Higher collateral = safer loan * Interest Rate - Higher rates = better returns but higher risk * Loan Duration - Shorter loans = faster returns * Borrower History - Check if they've successfully repaid loans before * Collateral Type - Stable tokens are safer than volatile ones Risk Management: * Don't put all your money in one loan * Diversify across multiple loans * Start with smaller amounts to learn * Consider the collateral's price volatility ### Getting Your Money Back #### After a Successful Loan When a borrower successfully repays their loan: 1. Claim Your Repayment * Go to the loan details page * Click "Claim Repayment" * Burn your LoanShare tokens * Receive your USDC principal plus interest 2. Your Returns * You get back your original USDC investment * Plus the interest earned on the loan * Minus protocol fees #### If a Borrower Defaults When a borrower fails to repay: 1. Loan Gets Liquidated * Anyone can trigger liquidation after the deadline * The loan state changes to "Defaulted" 2. Claim Your Collateral * Click "Claim Collateral" on the defaulted loan * Burn your LoanShare tokens * Receive the borrower's collateral tokens instead of USDC 3. Understanding the Value * You get collateral worth your original investment * The value depends on current market prices * You can hold or sell the collateral tokens #### If a Loan Gets Cancelled When a borrower cancels their loan: 1. Get Your USDC Back * Click "Withdraw Funding" on the cancelled loan * Burn your LoanShare tokens * Receive your original USDC investment 2. Rejection Fee Bonus * If the loan was partially funded, you might get extra collateral * This is the rejection fee from the borrower's collateral ### Common Scenarios #### Scenario 1: Successful Loan * You fund 1000 USDC at 10% interest * Borrower repays on time * You claim 1100 USDC (1000 + 100 interest) #### Scenario 2: Defaulted Loan * You fund 1000 USDC * Borrower defaults, loan gets liquidated * You claim collateral worth 1000 USDC (current market value) #### Scenario 3: Cancelled Loan * You fund 1000 USDC * Borrower cancels the loan * You get 1000 USDC back plus any rejection fees ### Important Notes Timing: * You can only claim after the loan reaches its final state * Repaid loans: Claim your USDC + interest * Defaulted loans: Claim the collateral * Cancelled loans: Claim your USDC back Fees: * Protocol fees are taken from interest earned * Gas fees apply to all transactions * No fees on your principal investment Security: * Your funds are protected by smart contracts * No one can access your investment except you * Collateral is locked until loan completion --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.liquify.ventures/for-lenders.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.