> For the complete documentation index, see [llms.txt](https://docs.arenas.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.arenas.fi/atomica/key-concepts.md).

# Key Concepts

Atomica is the **credit engine** underneath every Arenas Financing Market. This page defines the objects and terms used throughout the Atomica section so the rest of the docs stay short.

***

### The building blocks

| Concept                      | What it is                                                                                                                                                                                      |
| ---------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Financing Market**         | The market contract for one real-world program (e.g. `Brazil – Coffee – USDC`). Holds the request → approve → receive → repay logic and routes funds between borrowers and pools.               |
| **Pool (Financing adapter)** | The liquidity side of a market. LPs deposit the asset token and receive **pool shares**; the pool supplies capital to the market when a borrower draws down.                                    |
| **Asset token**              | The single ERC-20 a market uses for both supply and repayment (typically a stablecoin such as USDC).                                                                                            |
| **Access token (NFT)**       | A borrower’s eligibility credential in a market. Owning the access token is what lets an address create requests and draw down — there is **no ERC-20 collateral** to post.                     |
| **Financing request**        | A borrower’s ask: an amount, a minimum acceptable amount, a rate ceiling (or fixed repayment), and a duration. Reviewed before any money moves.                                                 |
| **Financing**                | An active loan created once an approved request is drawn down. Tracks obligations until repaid.                                                                                                 |
| **Obligations**              | The live on-chain accounting of what a borrower owes on a financing: **principal**, **interest**, and **other obligations**.                                                                    |
| **Intent**                   | A standing liquidity offer from a pool — an amount available at a given rate. Draw-downs are filled from intents, cheapest first. See [Intents & Liquidity](/atomica/intents-and-liquidity.md). |

***

### Two kinds of financing

A request is created as one of two types, fixed at request time:

* **Interest-accrual** — interest accrues over time against a borrower-set **rate ceiling** (`maxRate`). Open-ended; repay principal and accrued interest whenever due.
* **Fixed-repayment** — the borrower commits to a single **fixed repayment amount** over a set **duration**, rather than an accruing rate.

***

### The lifecycle at a glance

Every financing follows the same path. The important detail — often misunderstood — is that **approve and receive are two separate steps**:

```mermaid
flowchart LR
    A[REQUESTED] -->|approver authorises amount| B[APPROVED]
    B -->|borrower draws down| C[ACTIVE / FILLED]
    C -->|repay principal + interest| D[Repaid]
    A -->|closeRequest| E[CLOSED]
    B -->|closeRequest| E
```

* The **approver** authorises an amount (possibly partial). This moves **no funds** — it opens a **timed receive window**.
* The **borrower** later **draws the money down themselves** inside that window, with liquidity auto-selected from lender intents.

See [Financing Request Lifecycle](/atomica/financing-request-lifecycle.md) for the full state machine and statuses.

***

### Undercollateralized & approval-gated

Unlike a typical money market, Atomica has **no on-chain collateral and no price-based liquidation**:

* Eligibility is the **access token**, not locked collateral.
* Every draw-down requires an **approver’s** sign-off.
* Repayment is backed by an **off-chain legal agreement**, enforced off-chain.
* A non-performing loan can be **sold on a secondary market** at a discount, with proceeds refunded to the pool’s LPs.

See [Roles & Permissions](/atomica/roles-and-permissions.md) for who can do what, and [Atomica Risks](/atomica/atomica-risks.md) for how these trade-offs are managed.

***

### Supported networks

| Network      | Chain ID | Type    |
| ------------ | -------- | ------- |
| Base         | 8453     | Mainnet |
| Arbitrum One | 42161    | Mainnet |
| Boba Network | 288      | Mainnet |
| Base Sepolia | 84532    | Testnet |
| Sepolia      | 11155111 | Testnet |