How It Works

Superposition works as a decentralized credit platform. It connects lenders to borrowers, generating yield for the former and providing credit capital to the latter.

Economic Model

Each supported instrument is pooled together in a lending pool. Lenders receive their pro rata share of the interest payments borrowers pay upon borrowing from these pools. Under this framework, the entire pool itself has a single interest rate, which all borrowers of that specific instrument pay.

Floating interest rates

The interest rate for each instrument floats. It is a function of the utilization of the pool (ratio of borrowed capital to supplied capital), and changes immediately with each change to the utilization.

Perpetual tenor

The loans have no fixed maturity and no repayment schedule. They are perpetual, with interest compounding continuously. The incentive borrowers have to repay their loans is to unlock their pledged collateral.

Collateral

Every borrower must maintain a minimum amount of equity in their portfolio. That is, the value of their collateralized assets must exceed the value of their debts by some specified margin. Superposition makes use of Concordia’s risk engine, which allows for cross-collateralization within a portfolio. All assets and all liabilities are considered together when setting the minimum equity for a portfolio.