Cross‑chain Lending

1 min read

Pronunciation

[kraws-cheyn len-ding]

Analogy

Like pledging property in one country to get a loan in another country’s currency.

Definition

that allow collateral on one to secure loans on another, leveraging bridges and cross‑chain oracles to manage collateralization and liquidation.

Key Points Intro

Cross‑chain lending extends credit across network boundaries.

Key Points

Lock‑mint collateral: Collateral locked on chain A mints vTokens on chain B.

Cross‑chain oracle: Feeds collateral and loan valuations across chains.

Liquidation: Under‑collateralized positions liquidated via bridge callbacks.

Interest accrual: Rates may differ per chain and are aggregated.

Example

A user locks ETH on and borrows DAI on ; if ETH price falls, liquidators trigger unlock on via proof.

Technical Deep Dive

Collateral manager on origin chain locks asset, emits event. Relayer submits proof to lending contract on destination, which mints debt and tracks LTV. Liquidation triggers reverse proof to debt and release collateral.

Security Warning

lag can cause mistimed liquidations; use conservative thresholds and time‑locks.

Caveat

Cross‑chain delays amplify liquidation risk during volatile markets.

Related Terms

Borrowing Protocols

Oracle

Blockchain & Cryptocurrency Glossary

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