Statics lending is self-backed: a borrower deposits BasketTokens as collateral and borrows the proportional constituent vector against them. There is no price oracle and no external liquidation. The loan is overcollateralized by its own deposited basket at a creator-chosen loan-to-value.

#How it works

Only BasketTokens deposited through the collateral interface can be locked for borrowing. Deposited and locked BasketTokens keep earning their basket's share of canonical hook fees in both the BasketToken and constituent assets — locking does not remove them from the reward denominator.

borrow creates an independent tranche owned by the PositionNFT:

  1. the origination fee is taken as a BasketToken-share reduction whose underlying backing is reclassified into the global fee ledger;
  2. the remaining locked shares determine debt shares at the configured LTV and a creator-selected recovery penalty proportional to that debt; and
  3. debt plus penalty must fit inside collateral.
Origination
feeShares        = ceil(sharesIn * originationFeeBps / 10000)
collateralShares = sharesIn - feeShares
debtShares       = ceil(collateralShares * ltvBps / 10000)
penaltyShares    = ceil(debtShares * recoveryPenaltyBps / 10000)

Creation and origination require debtShares + penaltyShares <= collateralShares.

#No price-oracle liquidation

Because principal is bounded by the self-backed collateral vector and LTV is at most 95%, an unpaid loan does not create bad debt or a claim on another basket. Only the configured debt-proportional penalty is charged on recovery. There is no socialized-loss waterfall.

#The 95% protocol ceiling

Each basket sets its own LTV at or below 9,500 BPS, capped by the immutable 95% protocol ceiling. At 95% LTV, an ideal zero-fee recursive mint, deposit, and borrow sequence converges below 20 times the initial deposited shares and 19 times the initial debt. Routers must impose their own depth, quote-freshness, approval, and slippage limits.

#Independent tranches

Every loan is its own tranche with its own principal vector and maturity. Repayment unlocks only the repaid tranche; extension changes a tranche's maturity but not its principal, collateral, or global stake. See Loan lifecycle.