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OTC Lending

Your Bond Trading Hub

Overview

Welcome to the world of OTC Lending on Secured Finance's platform. Here, we're all about enabling peer-to-contract lending and trading of Zero-Coupon Bonds in a way that's simple, efficient, and transparent.
So, what's the deal with OTC Lending? Well, it's a process where you can either buy or sell zero-coupon bonds. When you buy a bond, you're essentially lending out your assets, and when you sell a bond, you're borrowing assets.
You can add to or reduce your position at any time. Need to unwind a trade? No problem. You can do that too. And the best part? All of this is done via our Orderbook, meaning it's done by trading against other counterparty on our smart contract.
Now, you might be wondering:

How does OTC Lending work on Secured Finance?

When you buy a zero-coupon bond, you're lending out your assets to our Smart Contract. The order will be matched with another user via our smart contract. You'll receive your principal plus interest which will accrue value over time until it reaches its face value at maturity. On the other hand, when you sell a bond, you're borrowing assets. You'll receive the assets upfront and pay back the face value of the bond at maturity.

What's the benefit of OTC Lending?

OTC Lending on Secured Finance allows you to earn interest on your assets or borrow assets in a flexible and efficient manner. You can add to or reduce your position at any time, giving you full control over your investments. You will trade against the market on our Orderbook.

What happens if I need to unwind a trade?

Unwinding a trade is as simple as selling your bond if you're a lender, or repaying your loan if you're a borrower. The platform's design ensures that you can easily find counterparties to unwind trades, making the process smooth and efficient.

What will happen to my matured loan?

When your loan matures, the funds are automatically reinvested into the nearest 3-month maturity through our Auto-Roll feature. This ensures a smooth and efficient reinvestment process, mitigating reinvestment risk and promoting continuous growth for users. For more details, you can refer to our Auto-Rolling section.

How does Secured Finance ensure the safety of my loan?

Secured Finance ensures the safety of your loan through a combination of collateral management and smart contract technology. Borrowers are required to pledge collateral, which can be seized in the event of a default. This reduces counterparty risk and ensures the security of the loan. Additionally, all transactions on Secured Finance are executed through smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. This ensures that all terms of the loan are automatically enforced, further enhancing the safety of your loan. For more details, you can refer to our Collateral section and Technical Overview section.
To learn how to trade on Secured Finance, check out our User Guides. Dive in and start your journey with OTC Lending today!