Zero-Interest Lending

Ethos Reserve issues interest-free loans denominated in the $ERN stablecoin. Instead of paying interest, users pay a small issuance fee, meaning they don’t need to worry about micro-managing their position. The issuance fee usually sits around 0.5%, but it varies slightly depending on the state of redemptions. Learn more about redemptions in this section.

There is no fee for paying back a loan.

ERN Loan Example

• If a user deposits sufficient collateral, they can take out a 100 ERN loan.

• Their total debt will appear as 110.5 ERN, which is made up of a 0.5% issuance fee (in this case 0.5 ERN), 10 ERN held as a liquidation deposit, and 100 ERN minted to the user’s wallet.

• When the user pays back 100.5 ERN, the 10 ERN liquidation deposit will automatically be paid into their position and the position will be closed.