Protocol Operations

Cyclic Protocol's lending process is automatically executed by a series of smart contracts to ensure the transparency and efficiency of the entire system.

The following are the core operating procedures:

1. Collateral Deposit Users deposit locked liquidity tokens (LP) or other tokens as collateral into smart contracts, and the system automatically evaluates their value and calculates the maximum amount that can be borrowed.

2. Borrowing Users apply for loans based on the value of the collateral, and the smart contract lending pool will release the loan to the user's wallet and record the loan amount, interest rate and repayment period.

3. Repayment Users can repay the loan at any time and pay the corresponding interest. After the repayment is completed, the system will automatically release the collateral assets, and users can get back their LP tokens or tokens.

4. Liquidation If the value of the user's collateral assets is lower than the safety threshold, the system will trigger an automatic liquidation mechanism, and some or all of the collateral assets may be sold to repay the debt to ensure the security and stability of the lending pool.

5. Governance CYC token holders can vote to determine key parameters of the protocol, such as lending rates, liquidation ratios, liquidity pool allocations, etc., to ensure the healthy development of the protocol.