What this page covers
EDMA's DeFi lending layer turns verified real-world assets into productive collateral. Borrowers post Energy NFTs, Carbon NFTs, $ETT proof units, $CLE balance, or EMT receivables and receive $EDSD against the locked position. This page covers the five accepted collateral types with their LTV ratios, the six-stage lending flow from initial deposit to final repayment or liquidation, dynamic interest rate mechanics, and the integration with EDMA's broader settlement architecture.
The core difference from generic DeFi lending: EDMA's collateral has provenance. Every asset arrived through a PoV-gated mint with attestor signatures, registry-mirror anchoring (where applicable), and One-Claim uniqueness enforcement. The lending protocol can offer higher LTV ratios on certain classes (EMT receivables at 80-90 percent, $CLE at 70-80 percent) because the assets carry verifiable provenance that traditional crypto collateral lacks.
How LTV is assigned by class
LTV reflects collateral risk profile. EMT receivables that have already passed the PoV Gate carry the highest LTV (80-90 percent) because the only remaining risk is settlement block timing. $CLE balance carries 70-80 percent because the protocol maintains a $5 governance anchor that bounds downside. Energy NFTs sit at 60-70 percent because they trade in liquid secondary markets but face spot price volatility. Carbon NFTs are 50-65 percent with adjustments by vintage (newer high-integrity vintages get higher LTV) and methodology (Verra/Gold Standard get higher LTV than older methodologies under review). $ETT proof units carry the lowest LTV (40-55 percent) because they require aggregation before secondary-market sale.
Oracle pricing combines on-chain and external sources. The protocol's oracle layer uses a TWAP across the EDMA marketplace plus external venue prices: REC registry quotes for Renewable Energy Certificates, voluntary carbon market clearing prices (Carbonmark, AlliedOffsets, EAR-listed brokers), regional GO spot rates for European certificates. Wick resistance is built in: 30-minute averaging window, maximum per-block deviation bounded at 5 percent, multi-source consensus required for outlier rejection.
Borrower transfers approved collateral (Energy NFT, Carbon NFT, $ETT, $CLE, or EMT receivable) to the Lending contract. The asset locks in a per-borrower vault with the original metadata preserved (PoV hash, claim ID, vintage, methodology). The vault emits a CollateralPosted event with the asset class, quantity, and oracle reference price.
The protocol's oracle layer computes a fair value using a TWAP across the EDMA marketplace plus external venue prices (REC registry quotes, voluntary carbon market clearing prices, regional GO spot rates). The oracle resists wick-based manipulation by averaging over a 30-minute window and bounding maximum per-block deviation.
The Lending contract calculates the max loan size as oracle price multiplied by LTV ratio for the collateral class. The borrower receives the loan amount in $EDSD, minted to the borrower's address. The position records the principal, the LTV, the interest rate (utilization-based, dynamic), and the liquidation threshold (typically LTV + 10 percent margin).
Interest accrues hourly at a dynamic rate that responds to pool utilization: higher borrowing demand raises rates, lower demand lowers them. Typical range: 4-12 percent APR on the borrowing side, 3-8 percent APY on the lending side. Interest accumulates to the principal; borrowers can repay partial amounts to reduce ongoing accrual.
The protocol monitors each position's health factor (collateral value / debt value, scaled by liquidation threshold) on every oracle update. Borrowers receive alerts when health factor approaches 1.0 (liquidation imminent); they can repay debt or add collateral to restore health. The dashboard shows liquidation price for every active position.
On repayment, the borrower returns principal plus accrued interest in $EDSD; the protocol burns the debt and releases the collateral. If the health factor falls below 1.0, anyone can trigger liquidation: the protocol auctions the collateral on the marketplace, pays down the debt from auction proceeds, and returns any surplus to the borrower (minus a 5 percent liquidation fee that funds the insurance pool).
Interest rates and liquidation
Dynamic interest rates respond to pool utilization through a standard kinked curve: rates stay low and stable below 80 percent pool utilization (encouraging healthy borrowing), then steepen sharply above 80 percent to incentivize repayment and lender deposits. Borrowing rates typically range 4-12 percent APR depending on collateral class and utilization; lending APY runs 3-8 percent on the same pool. Interest accrues hourly and is paid in $EDSD at repayment.
Liquidations trigger when the position's health factor (collateral value × liquidation threshold / debt) falls below 1.0. Anyone can call liquidate(positionId) to initiate; the protocol auctions the collateral on the marketplace, repays the debt from auction proceeds, and returns any surplus to the borrower minus a 5 percent liquidation fee. The fee funds the insurance pool (see Liquidity / insurance). Liquidations never force retirement of carbon credits; the credits sell on the marketplace and remain available for the next buyer.
Use cases and integration
Renewable energy projects borrow $EDSD against Energy NFTs to fund equipment, operational expenses during early stages, and certificate aggregation costs. The producer keeps the underlying generation rights and can repay from certificate sales as they clear the marketplace.
Carbon project developers use Carbon NFTs to bridge the gap between issuance and final sale. Vintage-adjusted LTVs allow newer ICVCM-tagged credits to attract working capital at competitive rates.
Trade suppliers borrow against EMT receivables for immediate liquidity while waiting for the Locked-to-Unlocked block. This is the highest-LTV class because the payment is contractually committed; only settlement timing creates the borrowing need.
Retail consumers with $CLE balance can borrow $EDSD without selling their position, enabling them to fund EV charging, solar panel purchases, or short-term liquidity without losing exposure to $CLE's governance-anchored value.
Continue exploring EDMA DeFi
For the broader staking architecture (veEDM, governance weight, epoch rewards from the Stakers bucket of the treasury split), see Staking (DeFi). For tokenized green bonds and structured products built on PoV-gated cash flows, see Structured finance. For market-making rewards and the insurance pool that backstops liquidation events and attestor mis-attestations, see Liquidity / insurance. For the underlying collateral assets themselves see $ETT, $CLE, and $EDSD.
