Overview

Lending against tokenized stocks normally requires a vault, a deposit, a share token and a claim process. LOX replaces all of that with a token that trades on Robinhood Chain like any other, on Fomo, on Uniswap, in any wallet that can hold an ERC-20.

Buying LOX deposits USDG into a shared pool. Holders of tokenized stocks borrow from that pool against their shares and pay interest into it. To lend, buy LOX. To stop lending, sell it. Borrowers are paid too: a share of every payment they make buys them LOX, released when the loan is repaid in full.

Every loan is overcollateralised. A borrower posts AAPL, TSLA or NVDA worth more than the loan, up to a loan-to-value limit set for each stock. If the stock falls toward the debt, or the loan expires unpaid, the stock is sold and the pool is repaid first.

The price of LOX moves with the cash in the pool, set by a bonding curve against a fixed virtual balance. Buys and repayments add USDG and raise the price. Loans and sells remove USDG and lower it. A repaid loan leaves the price higher than before the loan by the interest paid. LOX has no guaranteed price or yield, and the pool shrinks if a collateral sale falls short of the debt.

Read the risks before you buy or borrow.

Market

The market is a Uniswap v4 hook that holds the entire LOX supply and all deposited USDG and acts as the pool's only liquidity provider. Between swaps the pool is empty. For each swap the hook moves the pool to the bank's price, places one concentrated position that reproduces the curve, lets the PoolManager fill the trade, and withdraws the position. Every trade is a standard v4 swap, visible to price trackers and routers. External liquidity is not accepted. Exact-input swaps only.

The curve prices LOX against the USDG in the pool plus a fixed virtual balance of 100,000 USDG. The virtual balance sets the opening price of $0.0001 per LOX and cannot be withdrawn. Until deposits exceed it, the quoted price is above the backing per LOX; the swap page shows both.

When most of the reserve is lent out the price is low: selling is unattractive and buying is cheap. A buyer at that point holds LOX backed by the cash they added, and each repayment lifts the price for every holder. Buyers and sellers use the same curve, so a round trip cannot profit.

A buy always clears. A sell clears when the cash on hand covers the payout plus a small safety margin of about 0.01% of the curve, which on this curve is nearly always. In a nearly empty pool that margin is about 10 USDG, so the last few dollars cannot be sold into until more cash arrives. The swap page shows the current cash. At most half of the reserve can be out on loan at any time.

Loans, repayments and fees change the bank's price between trades. The pool price is moved to match before the next swap; anyone can move it earlier with syncPrice. The chart on the swap page is built from the market's trade events, also available at /api/trades.

Loans

Approved collateral is AAPL, TSLA and NVDA Robinhood Stock Tokens. A borrower posts collateral and receives USDG up to the loan-to-value limit, less an origination fee. The rate is set by utilisation when the loan opens and fixed for the term.

Loans run for a fixed term and can be extended by paying the interest due at the current rate. Repayments settle interest before principal. Full repayment releases the collateral. Collateral can be added at any time and withdrawn while the loan stays within its limit.

Each transaction carries the rate, fee, term and deadline shown on screen. If any of them changes before confirmation, the transaction is rejected.

Borrowing is open from launch. The stocks listed at deployment are live at once, because nobody held LOX yet. From the book's first loan on, a newly listed stock, a raised cap, looser terms or a new oracle waits at least a day before taking effect, so holders always see it coming. Tightening is immediate.

Each stock has its own debt cap within the reserve limit. Borrowed USDG can be used to buy LOX. That is leverage: the loan is due in USDG regardless of the LOX price, and LOX is not accepted as collateral.

Borrowing is rewarded. A share of every payment a borrower makes, origination and interest, buys LOX for them at that moment's price and holds it against the loan. Repay in full and the LOX is theirs to claim from the borrow page. A liquidated loan forfeits it. The share is highest when the book is empty and falls as utilisation rises toward the cap, so the rebate goes to the borrowers who arrive first. At the launch setting a borrower on an empty book paying 6% effectively pays about 4.8%.

Interest

Interest and the pool's share of fees are paid in USDG and enter the price on arrival: origination fees when a loan opens, interest when it is repaid or extended.

Supply only falls. One percent of every LOX sold is burned instead of returning to the curve. A share of treasury revenue is set aside for buybacks; once per epoch, anyone can spend it to buy LOX from the curve and burn it.

Borrowers earn LOX from the same budget. Each time a borrower pays the bank, at origination and on every interest payment, a share of that payment buys LOX from the curve at that moment's price and holds it against the loan. Repay in full and the LOX is released to claim. Get liquidated and it is burned. The buys happen after each payment, so a borrower cannot choose the price, and they never exceed the buyback budget on hand.

Idle cash

Cash that is not lent out can be parked in an ERC-4626 vault holding USDG, so it earns while the loan book does not need it. The parked amount counts as cash and its yield enters the price like interest. A sell or a loan that needs more than what is on hand pulls the shortfall from the vault in the same transaction; if the vault cannot return it, the sell or loan fails the same way it does when cash is short.

The vault, the share of cash to park (at most 80%) and the amount always kept on hand are owner settings. Replacing a vault waits a day. The guardian can recall everything to the pool at once, after which parking stops until the owner resumes it. A vault loss is a cash loss and lowers the price. The swap page shows the parked amount when a vault is set.

Liquidation

A loan can be liquidated when its term expires or its collateral falls below the liquidation threshold. Anyone can start the sale. The collateral is held in escrow and offered for USDG at a discount to its oracle price that grows one percentage point per day to a maximum of five. Buyers pay USDG and receive the stock.

Proceeds pay a bounty to whoever started the sale, then principal and interest to the pool. Sales stop once the debt is covered. Unsold collateral and any surplus return to the borrower, who can also repay during the sale. If all collateral sells and a shortfall remains, it is written off. If a token refuses a payout, for example to a frozen address, the amount is recorded as owed and can be claimed later, so it never blocks the sale or a repayment.

Collateral in auction counts towards backing on the swap page at the lower of its remaining debt and its discounted oracle value. It is not cash.

The auction sells whatever a loan was secured by; it does not depend on the collateral having a trading pool. That is what allows the loan book to accept other tokenized assets over time, each with its own feed, cap and terms, once listed through governance.

Fees

At launch, buys carry an extra tax that starts at 90% the moment trading opens and falls in a straight line to zero over thirty minutes, so that bots racing to be first gain nothing by it. The swap page shows the current rate while it applies. All of the tax stays in the pool as cash, where it lifts the price for every holder; none of it goes to the protocol or the treasury. Sells are never taxed, and the tax cannot be switched on again once trading has opened.

The reserve fee stays in the pool. The protocol fee is paid to the protocol. Values are read from the deployment where available, otherwise they are launch defaults.

Oracles

Collateral is priced by Chainlink feeds for each stock token, adjusted for the issuer multiplier so splits and other corporate actions are reflected. USDG is priced by its own feed.

Stock feeds update only while US markets are open, and only on a 0.5% move or once a day. The oracle accepts a stock price for up to 26 hours after its last update, which covers an overnight but not a weekend or holiday. While a feed is stale or the token is paused by its issuer, borrowing, collateral withdrawal and auction purchases are unavailable. Repayment, extension, adding collateral and trading LOX are unaffected; an extension checks the loan's health only when a price is available.

Chainlink does not yet publish a sequencer uptime feed for Robinhood Chain. Until it does, a sequencer outage shorter than the age bound is not detected. The contracts support the feed and it will be enabled when available.

Governance

The protocol has a single operator, who holds the owner key directly. There is no multisig and no timelock. What slows the owner down is in the contracts themselves, listed below. A guardian can pause new borrowing, auction starts and swaps immediately; only the owner can resume them.

The contracts bound what the owner can change. Loan-to-value cannot exceed 80%, the liquidation threshold cannot exceed 90%, and the protocol fee cannot exceed 3%. Listing a new stock, loosening its terms or raising its debt cap takes effect after a delay of one to seven days; tightening is immediate. Replacing a price feed, the oracle itself or the float's vault is pending for a day before anyone can apply it. The loan book cannot be replaced while principal is outstanding. Supply and the virtual reserve are fixed at deployment. The price is the virtual balance plus cash and nothing else: the loan book, auction collateral and the oracle never enter it, and no owner setting can change that. The loan-to-value and threshold ceilings are the solvency limit of the auction, not launch terms; launch terms are lower.

Contracts

Risks

• Selling pays what the cash supports. The price is lower while the book is lent out and recovers as loans repay. Loans can be extended, so there is no fixed date by which cash returns. A very large sell can exceed the cash on hand and fail.
• An unrecovered loan is cash that does not return. A write-off does not move the price; it makes the drop from the loan permanent. Recovery depends on auction buyers, open markets and live feeds.
• The quoted price exceeds backing while the virtual reserve is a large share of the pool. The premium is highest when most of the supply has been bought.
• The price moves with loan flow and is more volatile than a token whose loans are priced at par.
• Stock prices stop updating when US markets close. While a price is stale no loan can be opened against that stock and its collateral cannot be auctioned, and a stock can reopen far from where it closed. A loan that was safe on Friday can be liquidated at Monday's first price.
• A sell needs a small margin of cash beyond its payout. In a nearly empty pool the last few dollars cannot be sold into until more cash arrives.
• Buying LOX with borrowed USDG is leverage. The loan is due in USDG regardless of the LOX price.
• If idle cash is parked in a vault, the vault's solvency and liquidity become the pool's. A vault loss lowers the price; a frozen vault can block sells and loans until the guardian recalls what it can; a vault that stops answering is counted as zero and can be written off.
• The operator holds significant powers within the bounds above. Verify the deployed governance before depositing.