40 Acres offers self-repaying, interest-free, non-liquidating loans.
Now 40 acres supports Aerodrome's and Velodrome's veNFT (voting escrow NFT).
User locks their ERC-20 protocol utility token receiving an ERC-721 governance token. The lock period (also known as vote-escrowed period) can be up to 4 years, following a linear relationship. The longer the vesting period, the higher the voting power (vote weight).
Loans against veNFT
Users can create loans based on the average weekly veNFT rewards multiplied by the number of epochs.
The multiplier of epochs represents the future maximum upfront income a user can borrow. Currently, the multiplier is set to 8 epochs. The plan is to gradually increase the epoch multiplier as the protocol evolves.
40acres loans are repaid weekly according to the cycle of Aerodrome and Velodrome epochs. The borrower can repay the loan early at no additional cost to regain access to their collateral.
40 Acres automatically manages the voting power of borrowers. At the start, they will vote in the CL-100 ETH/USDC pool (CL - concentrated liquidity).
A tick spacing of 100 (CL100) allows a minimum liquidity range of about 100 basis points wide (a 1% price range).
This pool has the most historical data, high liquidity and stable fees.
40acres allows users to passively grow their USDC holdings by automatically compounding rewards into USDC and contributing USDC to loan pools. Such USDC Relayer is only available to veNFT holders when the veNFT has no outstanding loans.
Lending
40 Acres utilizes a peer-to-peer lending model. In this, lenders receive their share of the total rewards.
Interest is distributed evenly over a 7-day period based on the previous week's voting rewards.
Insurance
Until the protocol is out of beta status it insures the USDC base vault for up to $1 million. The insurance covers hacks at the Aerodrome.
