This article’s purpose is to clarify the main functions of Flux Protocol — lend, borrow, and liquidate. This article only covers the basics of the three functions, and upcoming articles will go into more detail about them!

Lend (Supplying Assets)

Users supply their assets into Flux Protocol, which aggregates the assets of all users forming an aggregated digital asset market — money market. Similar to other Web3 lending platforms, such as Compound protocol, once a user supplies the protocol with their assets, these assets become fungible. Liquidity providers (Lenders) can withdraw their supplied assets at any given time and do not need to wait for their specific loan to mature.

Borrow (Borrowing Assets)

On Flux Protocol, users can borrow assets available in the money market by depositing collateral. The collaterals are digital assets, such as BTC, ETH, USDT, DAI, which are pre-determined by Flux Protocol, and are similar to a collateral in a mortgage loan.

Liquidate (Liquidation of Assets)

When the collateral assets value of borrowing users falls below a certain threshold, it will be liquidated by other users to protect the liquidity suppliers (lenders) and to maintain the protocol's requirement of over-collateralization.

Flux Protocol is a borderless lending protocol, where low transaction fees and cross-chain interoperability are the reality