Every loan in the CDL dApp has a fixed borrowing rate of 0.07% per day (a value subjected to future changes).
Before you borrow tokens, you must add liquidity which will be used as collateral for your own loans. Then, you'll be able to borrow any of the tokens available in the dApp. New assets are added continuously and will be expanded over time to create the largest range of borrowing assets.
Once you've added liquidity, you'll be able to borrow tokens. To do so, you must specify the amount and the time you require to repay it back. The interest rate will increase the more time you want to repay the loan.
For instance: let's say you want to borrow 1000 tether and you expect to be able to pay it back in 200 days. The dApp will show you how much you'll have to repay back with the added interest rate. In this particular case and assuming an interest per day of 0.07% per day, your final borrowing fee will be 200 * 0.07% = 14%. Meaning you'll have to repay 1000 + 140 tether before 200 days have passed since the loan creation.
If you're confident in being able to repay the loan sooner, you can choose a shorter repayment time with the subsequent reduced fee. The maximum time you can choose to repay a loan is 365 days and the minimum is 1 day.
Compared to other lending dApps, this system enables borrowers to have predictable, fixed interest rate loans that don't change depending on other variables so you always know how much you have to repay and how much time you have available to do so.
If you fail to repay your loan on time, it will be defaultable by any user that notices either via the smart contract directly, or by using a script that checks and defaults expired loans. Your collateral will be consumed and given to liquidity provider while closing the loan. The caller always gets a 15% reward from doing so from the profit.