🏦For Lenders

Welcome to the DreamLend Lender Guide! As a lender, you provide capital to borrowers and earn competitive interest rates while helping grow the decentralized finance ecosystem.

🎯 What is Lending on DreamLend?

Lending on DreamLend allows you to:

• Earn Interest: Set your own rates and earn passive income

• Control Risk: Define collateral requirements and loan terms

• Earn Rewards: Receive $DREAM tokens through liquidity mining

• Stay Liquid: Cancel offers anytime before acceptance

💰 How Lenders Make Money

1. Interest Income 📈

• Set competitive annual interest rates (APR)

• Earn interest from loan origination to repayment

• Compound earnings by reinvesting

2. $DREAM Rewards 💎

• Earn $DREAM tokens for active loan principal

• Bonus rewards for long-term lending

• Governance rights with accumulated tokens

3. Liquidation Participation ⚡

• Monitor your loans for health

• Participate in liquidations if needed

• Earn liquidation bonuses

🚀 Getting Started as a Lender

Step 1: Prepare Your Wallet 💳

1. Connect Wallet: Use MetaMask or compatible wallet

2. Add Somnia L1: Configure network settings

3. Get Tokens: Acquire lending tokens (MUSDT, MUSDC, etc.)

Step 2: Create Your First Loan Offer 📝

1. Navigate to Create: Go to the "Create" page

2. Select Token: Choose token to lend (e.g., MUSDT)

3. Set Amount: Enter lending amount

4. Configure Terms: Set interest rate and duration

5. Define Collateral: Specify required collateral

Step 3: Monitor and Manage 📊

1. Track Offers: Monitor pending offers in "My Loans"

2. Manage Active Loans: Watch loan health and performance

3. Claim Rewards: Regularly claim $DREAM rewards

📋 Creating Effective Loan Offers

Setting Competitive Rates 🎯

• Market Research: Check existing offers for similar terms

• Risk Assessment: Higher rates for riskier collateral

• Duration Premium: Longer loans typically command higher rates

Example Rate Structure:

• Stablecoin Loans: 8-15% APR

• Volatile Asset Loans: 15-25% APR

• Long-term Loans: +2-5% premium

Choosing Collateral Requirements 🛡️

• Stable Collateral: USDC, USDT (lower ratios acceptable)

• Volatile Collateral: BTC, ETH (higher ratios required)

• Exotic Collateral: New tokens (highest ratios needed)

Recommended Collateral Ratios:

• Conservative: 150-200%

• Moderate: 130-150%

• Aggressive: 120-130%

Duration Strategy ⏰

• Short-term (7-30 days): Lower rates, higher liquidity

• Medium-term (30-90 days): Balanced risk/reward

• Long-term (90+ days): Higher rates, locked capital

🔍 Risk Management for Lenders

Understanding Risks 🚨

1. Default Risk

• Borrower Default: Borrower fails to repay

• Mitigation: Proper collateralization and liquidation

• Recovery: Liquidation provides collateral compensation

2. Collateral Risk

• Price Volatility: Collateral value fluctuation

• Mitigation: Conservative collateral ratios

• Monitoring: Regular health factor checks

3. Oracle Risk

• Price Feed Issues: Stale or incorrect prices

• Mitigation: Multiple oracle sources

• Protection: Automatic staleness checks

Risk Mitigation Strategies 🛡️

Diversification

Portfolio Allocation Example:
- 40% Stablecoin loans (low risk)
- 35% Major crypto loans (medium risk)
- 20% Altcoin loans (high risk)
- 5% Experimental loans (very high risk)

Active Management

• Daily Monitoring: Check loan health factors

• Quick Response: Act on liquidation opportunities

• Rate Adjustment: Update rates based on market conditions

Conservative Parameters

• Higher Collateral Ratios: 150%+ for safety

• Shorter Durations: Reduce exposure time

• Quality Collateral: Stick to established tokens

📊 Monitoring Your Loans

Key Metrics to Track 📈

Loan Health Factor

• Healthy: >150% collateral ratio

• At Risk: 120-150% collateral ratio

• Liquidatable: <120% collateral ratio

Performance Metrics

• Total Lent: Amount currently deployed

• Interest Earned: Cumulative interest income

• Active Loans: Number of ongoing loans

• Default Rate: Percentage of defaulted loans

Using the Dashboard 🖥️

My Loans Page

• Active Loans: Monitor ongoing loans

• Pending Offers: Track unaccepted offers

• Completed Loans: Review historical performance

• Health Alerts: Get notified of risky loans

Analytics Page

• Portfolio Performance: Track returns over time

• Market Trends: Understand rate movements

• Reward Tracking: Monitor $DREAM earnings

💎 Maximizing $DREAM Rewards

Reward Mechanics 🎁

• Base Rate: Earn rewards on active loan principal

• Bonus Multipliers: Long-term lending bonuses

• Liquidation Rewards: Extra rewards for liquidations

Optimization Strategies 📈

1. Maintain Active Loans: Keep capital deployed

2. Long-term Commitment: Longer loans earn more

3. Participate in Liquidations: Earn bonus rewards

4. Compound Rewards: Reinvest $DREAM earnings

Claiming Rewards 🏆

1. Navigate to Rewards: Go to rewards page

2. Check Balance: View accumulated $DREAM

3. Claim Tokens: Execute claim transaction

4. Reinvest: Use rewards for more lending

🔧 Advanced Lender Strategies

Rate Optimization 📊

Dynamic Rate Strategy:
1. Monitor market rates daily
2. Adjust rates based on demand
3. Premium pricing for quality terms
4. Competitive rates for quick deployment

Collateral Arbitrage ⚖️

• Identify Mispriced Collateral: Find undervalued assets

• Offer Attractive Terms: Encourage borrowing

• Profit from Liquidations: Benefit from price corrections

Seasonal Strategies 📅

• Bull Markets: Higher rates, more demand

• Bear Markets: Conservative terms, quality focus

• Volatility Events: Adjust ratios dynamically

🆘 Troubleshooting Common Issues

Offer Not Getting Accepted 🤔

Possible Causes:

• Rates too high compared to market

• Collateral requirements too strict

• Unpopular token pairs

Solutions:

• Research competitive rates

• Adjust collateral ratios

• Try different token combinations

Loan Health Declining 📉

Warning Signs:

• Collateral ratio dropping

• Price volatility increasing

• Approaching liquidation threshold

Actions:

• Contact borrower (if possible)

• Prepare for liquidation

• Monitor closely for opportunities

Liquidation Process 🎯

When to Liquidate:

• Health factor below threshold

• Loan past due date

• Borrower unresponsive

How to Liquidate:

1. Navigate to loan details

2. Click "Liquidate Loan"

3. Confirm transaction

4. Receive collateral + bonus

📚 Best Practices Summary

✅ Do's

• Diversify your lending portfolio

• Monitor loan health regularly

• Set competitive but profitable rates

• Claim rewards regularly

• Stay informed about market conditions

❌ Don'ts

• Over-concentrate in single assets

• Ignore health factor warnings

• Set unrealistic rates or terms

• Forget to claim rewards

• Panic during market volatility

🔗 Additional Resources

• Creating Loan Offers: Detailed offer creation guide

• Managing Your Offers: Portfolio management tips

• Risk Management: Advanced risk strategies

• API Documentation: Technical integration

• FAQ: Common questions answered

---

Ready to start earning with DreamLend? Create your first loan offer today! 🚀