Liquidity and lending

Spot liquidity and lending are separate deposits with different claims.

Spot liquidity providers supply both the token and USDC and receive transferable LP shares. The 1% spot fee stays in reserves. Returns depend on trading and the changing value of the two assets. Removing liquidity while positions are open must leave enough reserves for the market's risk checks.

Lenders supply USDC for long borrowing or tokens for short borrowing. Their shares are recorded in the market and are nontransferable. Lending functions exist onchain; the main trading interface is not a complete lending dashboard.

Lender withdrawals can use only assets that are idle or have been recovered. Borrowed inventory is not available for immediate withdrawal. Deposits for an asset are paused while loans in that asset remain outstanding. Matching-asset withdrawals can also be blocked by stale pricing or loans needing recovery.

If liquidation does not recover all principal, the market records the actual bad debt. That side of the lending vault stops accepting new deposits and loans under the current contract. Existing holders can withdraw recovered assets subject to the withdrawal checks. There is no guaranteed yield or fund that insures these losses.

The factory's initial LP and lending shares remain in the factory. An administrator has no withdrawal function for those shares.