Collect on a default

You will follow the same steps under the How to collect payment + interest example but you instead will receive both Dai and wETH (collateral) in this case. Please read the difference in the collection as mentioned below.

If there is a default (the borrower does not payback the loan), the lender will return rcTokens to Ruler Protocol and collect the following assets proportionally with their share of the Ruler Pair:

  • Repayments made from borrowers in the pair

  • Collateral defaulted/forfeited in the pair

Taking xRULER Pair (xRULER, Dai, 05/31/2021, 250) as an example.

1 xRULER deposited for the pair, 250 rTokens minted

Only half of the rrRulerDegen are paid back at the due date(a default rate of 50%)

The pair now has 0.5 xRuler + 125 Dai in the contract.

Each rcToken will be eligible to receive:

This equates to 0.732 cents per rcToken upon collection. You would have a loss of 26.8% on a 50% default rate assuming the current market price of xRULER is at $116.