Borrowers

People borrowing crypto assets from the Mortonn Protocol need to pay different interest rates. The interest paid by borrowers creates profits for trading lenders. Borrowing can be done through the platform interface or programmatically through smart contract integration.

Borrowers can open a vault, withdraw Mortonn securities, and sell them. This is economically similar to borrowing the target asset and selling it. If the target asset's price rises, the value of your debt also rises, and the value of your vault decreases. You might want to do this if you expect the target asset price to fall ("short") or if you expect the collateral asset price to rise and want to increase exposure to it ("leverage").

Traders can gain additional leverage by swapping debt Mor for more collateral assets, depositing them into the vault, and withdrawing more debt Mor. This increases their long exposure to the collateral asset (and short exposure to the target asset), but also increases their risk of liquidation. An application can abstract this process for users.

The protocol can also be designed to improve the efficiency of leveraged trading. For example, by having an atomic Mor minting feature, selling collateral assets on the BSC chain, and then checking whether the vault has sufficient collateral (if not enough collateral, cancel the entire transaction).