> For the complete documentation index, see [llms.txt](https://docs.syndromics.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.syndromics.xyz/protocol/syndication.md). # Syndication The name is the product. A borrow request on Syndromics is a small syndicated loan: a single request can be filled by many lenders, each taking a pro-rata slice at their own rate. ## Why syndicate * **Retail-sized lenders can participate in institution-sized loans.** A 200,000 USDG borrow against tokenized NVDA can be filled by twenty lenders at 10,000 each. * **Borrowers get a full fill without depending on one whale.** Depth comes from the breadth of the book rather than from a single balance sheet. * **Every lender's exposure stays isolated.** There is no shared pool and no shared bad-debt account. A lender who priced a slice at 8.5% carries exactly that slice. ## Slices and position NFTs At settlement the contract mints one ERC-721 position NFT per lender slice. The NFT records: * loan ID and market, * principal of the slice, * fixed APR of the slice, * start timestamp, * the lender's flags (`selfLiquidate`, `noClosedMarketLiquidation`). Interest accrues independently on each slice at its own APR. Repayments, refinancing payouts and liquidation proceeds are distributed pro rata by slice principal. Position NFTs are transferable, but only to addresses that pass the eligibility registry. That is what makes a secondary market for loan positions possible without loosening compliance. ## Pro-rata mechanics For a loan with slices (s\_1 \dots s\_n) and principals (P\_1 \dots P\_n) summing to (P): * A partial repayment of (R) reduces each slice's principal by (R \times P\_i / P). * Liquidation proceeds (X) (after the keeper's share of the penalty) are paid as (X \times P\_i / P), capped at each slice's outstanding principal plus accrued interest. Any remainder is the borrower's surplus. * Interest accrued to date on slice (i) is `P_i × apr_i × elapsed / 365 days`. Because APRs differ by slice, the borrower's effective rate is the principal-weighted average. ## Full fills only Settlement is atomic and requires the offers in the transaction to cover the request exactly. A request that cannot be fully covered by the book does not settle; the borrower lowers the principal or waits for more offers. Adding slices to an existing loan after settlement is on the roadmap. ## Senior and junior slices (roadmap) The next protocol release introduces tranching within a syndicate using the Centrifuge DROP/TIN pattern. A lender can elect to take the **junior** slice, which absorbs first loss in a liquidation shortfall in exchange for a higher rate, while **senior** slices are paid first. Tranching is opt-in per offer and changes nothing for lenders who do not use it. The waterfall is audited separately before it is enabled. ## Example: a twenty-lender fill A borrower requests 200,000 USDG against 2,500 NVDA tokens (about 441,000 USDG of collateral, LTV 45.4%). The relayer assembles twenty standing offers of 10,000 USDG each with APRs from 8.2% to 9.0%. One `settle` call: * escrows 2,500 NVDA, * pulls 10,000 USDG from each of twenty lenders (some from the Morpho vault if they opted in), * sends 199,500 USDG to the borrower after the origination fee, * mints twenty position NFTs. If the borrower repays after 30 days at a blended 8.6%, total interest is about 1,414 USDG, split across the twenty slices in proportion to principal and each slice's own APR. The protocol retains 10% of interest as its share. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.syndromics.xyz/protocol/syndication.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.