> 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/faq.md).

# FAQ

#### How is depositing in Arenas different from a typical DeFi lending protocol?

In a typical DeFi money market, borrowers lock more collateral than they borrow, and on-chain liquidations protect depositors.\
In Arenas, your deposit funds **credit-based, approval-gated** financing:

* Borrowers post **no on-chain collateral**.
* Every loan needs a **Market Operator** (or **Approver**) sign-off before your capital can be drawn.
* Every loan is backed by a **real-world legal agreement**, not just smart-contract rules.

The upside is yield from real-world financing; the trade-off is credit risk. See [Risks](/risks.md).

***

#### How do I earn yield?

Your pool shares grow in value from:

* **Interest payments** from borrowers on active loans.
* Potential **upfront incentives** borrowers pay to attract more capital.
* Optional **reward programs** funded by the protocol or third parties.

You can add bonus yield on top by delegating SomniaLend borrowing power through the [Credit Delegation Module](/credit-delegation.md).

***

#### Is yield guaranteed?

No. Yield is **not guaranteed**.

* If borrowers repay on time, you earn **interest and rewards**.
* If borrowers default, or if markets change, returns may be **lower than expected or negative**.

Always evaluate the risks before depositing.

***

#### Can I withdraw my funds at any time?

You can **request a withdrawal at any time**, but:

* Withdrawals are two-step and **time-locked** by the pool's withdrawal delay.
* They are **subject to available liquidity** in the pool.
* If much of the pool is lent out, your request may be:
  * **Partially fulfilled**, with the rest staying as pool shares.
  * **Delayed** until more loans are repaid.

The protocol always returns either assets or pool shares; it does not freeze your funds without a claim. See [Withdraw](/financing-markets/withdraw.md).

***

#### What happens to my deposit if a borrower does not repay?

Because there is no on-chain collateral to liquidate:

* The loan shows as **in default** on-chain.
* Recovery relies on **off-chain enforcement** of the signed loan agreement.
* Anything recovered is paid back to the affected pool.
* Any shortfall reduces the **value of pool shares** in that pool, including yours.

Exact processes for handling defaults depend on the legal and operational framework of each market.

***

#### Who decides which borrowers get my capital?

A **Market Operator**, or a separate **Approver** where the market has one, reviews every financing request. The Market Operator also:

* Monitors portfolio quality and market configuration.
* Makes agreements with Pool Curators to attract liquidity to the market.
* Controls the market's upgradable settings within protocol limits.

The specific criteria for who can act as a Market Operator and how they are appointed depend on the market and its governance setup.

***

#### When is my capital actually lent out?

Only when an approved borrower draws down, and only if your pool's offer is among the cheapest available at that moment. Approval alone moves no money. See [How Your Capital Is Lent](/financing-request-lifecycle.md) and [Intents & Liquidity](/intents-and-liquidity.md).

***

#### Where can I see the contract addresses?

The Arenas contract address is published on the [Credit Delegation Module](/credit-delegation.md) page; SomniaLend publishes its own at [docs.somnialend.finance](https://docs.somnialend.finance).\
Always verify that the address you interact with matches the documented one for your network.