Code is Law: how DAOLama connects LPs and borrowers

DAOLama is a protocol between liquidity providers and borrowers: one side supplies TON, while the other gets liquidity using NFTs as collateral

The main goal of the protocol is to keep the balance: borrowers get TON, while liquidity providers’ funds work safely

What’s happening with liquidity right now?

Current utilization is 99% – all funds are currently used in active loans

— DAOLama utilization is currently 99%

— almost all liquidity is already used in active loans

— this means demand for loans remains very high

— we are actively looking for new liquidity to expand the pool

— the current rate for liquidity providers is 37% APY

We are actively looking for new liquidity, and right now the protocol offers THE HIGHEST RATE ON THE MARKET – 37% APY

What happens during sharp market moves?

When TON rises and NFT floor prices update, loan parameters can change faster than usual

In this situation, some borrowers may need to repay part of the principal debt during renewal

Important: this amount does not “disappear”. It reduces the principal debt, so when the NFT is redeemed, the final repayment amount becomes lower

🏦 How does NFT liquidation work?

— if the loan is not renewed or the risk becomes critical, the NFT enters the liquidation stage

— first, there is a 24-hour buyback window for DAOLama NFT holders with the Buyback attribute

— if the NFT is not bought back within 24 hours, it goes to auction for liquidators

— the original owner can still participate in the auction and try to get the NFT back

All stages: renewal, buyback, auction, and calculations – are executed automatically by the smart contract. The team cannot manually interfere with these processes or change them upon request

Why can’t the team interfere?

DAOLama works as a decentralized protocol: the contract is already deployed on-chain and applies the same rules to all participants

This keeps the balance between borrowers and LPs. Manual intervention would create a risk for the funds in the pool and for the security of the entire protocol

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