# What PolyLend Does

PolyLend is a peer-to-peer lending protocol that lets users borrow USDC against Polymarket conditional token positions (ERC-1155). The design is heavily inspired by:

* [Blend](https://www.paradigm.xyz/2023/05/blend) – perpetual NFT lending with oracle-free liquidations via refinancing auctions
* [PolyLend](https://mirror.xyz/polymarket.eth/8t4zhQlAza5M52dV4lVvh94NDhbJr2Dos4qvih80flU) (Polymarket’s prototype) – a fixed-rate, over-collateralized lending system for conditional tokens with a 24-hour Dutch auction on loan termination

#### Key properties:

* Oracle-free risk management: No price oracles. Risk is managed purely via over-collateralization and lenders’ credit decisions.
* Peer-to-peer: Each loan is a bilateral agreement between a borrower and a lender.
* Over-collateralized: Collateral value is expected to exceed the principal at the time of loan initiation.
* Callable loans with Dutch auction: After a minimum duration, the lender can “call” the loan, kicking off a 24-hour interest-rate auction. Either a new lender refinances at a higher rate or the lender can reclaim collateral.
* Continuous compounding: Interest accrues continuously per second via InterestLib.