Financing Markets
Financing Markets are Atomica credit markets configured for specific real-world financing programs and governed by a Market Operator. Each market has its own liquidity, interest model and borrowers set, but all of them run on the same Atomica financing products described on the Atomica Protocol page.
What is a Financing Market?
A Financing market is a dedicated financing pool for a specific use case, for example:
Brazil – Coffee – USDC
A market can define:
Seniority of tranches repayment (whether it is a higher risk (junior pool - higher interest and later repayments), or a lower risk (senior pool - lower interest and earlier repayments),
What is being financed (sector / type of good (service) / program),
Which base asset is used for deposits and obligations (capital token - i.e. USDC),
How interest is priced for borrowers,
Who is allowed to borrow in that market.
What is being financed (sector / geography / program),
Which collateral is used for deposits and loans (capital token)
Under the hood, the market is a configurable smart contract that follows the rules of the underlying Atomica financing product.
Roles in a Financing Market
Market Operator
Sets up the market parameters within product limits.
Approves or rejects financing requests.
Earns a share of interest as a market fee.
Liquidity Providers (Lenders)
Supply the capital token to the market and receive LP tokens.
Earn interest (and possible incentives) from funded obligations
Are subject to the market’s liquidity and withdrawal rules.
Borrowers
Create a financing application (borrower specific NFT) on a particular financing market.
Submit financing requests with desired obligation amount. Requests are based on a specific financing application and linked to it.
Sign a real-world contract (financing agreement) for that market’s program.
Receive funds only after Market Operator (or Approver) approval and sufficient liquidity in market pools. It can be a partial approval of the requested amount, and it can be borrowed a part of the approved amount up to available liquidity and other financing request parameters/ limitations.
Financing Markets are therefore the place where Arenas connects on-chain liquidity with off-chain, program-specific financing terms/ agreements, all powered by the Atomica engine.
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