# ➤ Borrowers

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**Status: Roadmap — Q2 2026.** Treasury Lending is not yet deployed. This guide describes the planned mechanics so you can evaluate the product before launch.
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You hold STRAT and need ETH liquidity without selling. Treasury Lending lets you borrow esETH directly from the protocol treasury using STRAT + CDT as collateral — at a fixed rate, for a fixed term, with zero liquidation risk during the loan.

## Why Treasury Lending is Different

|                 | Treasury Lending                               | Typical DeFi Lending (Aave, Compound) |
| --------------- | ---------------------------------------------- | ------------------------------------- |
| **Rate**        | Fixed at origination                           | Variable, changes per block           |
| **Term**        | Fixed (6-month term)                           | Open-ended                            |
| **Liquidation** | After expiry only — impossible during the term | Price-triggered, any time             |
| **Collateral**  | STRAT + proportional CDT (both burned)         | Single asset (escrowed)               |

The critical difference: **no liquidation during the loan term.** A flash crash, a black swan, a week of 50% drawdowns — none of it can touch your position before expiry. Your only risk is forgetting to repay.

## How It Works

1. **Deposit** STRAT + proportional CDT — both are burned (not escrowed)
2. **Receive** esETH loan based on your pro-rata share of the treasury
3. **Hold** a transferable ERC-721 position NFT encoding all loan terms
4. **Repay** before expiry — principal + accrued interest (linear). Your STRAT and CDT are minted back
5. **Or default** — after expiry, anyone can liquidate. Collateral is permanently forfeited

Interest accrues linearly: repay at day 1 and you owe almost nothing. Repay at the halfway point, you owe half. The earlier you repay, the cheaper it is.

**Deep dive:** [Treasury Lending](/core-mechanics/treasury-lending.md)

## Rolling Your Position

Approaching expiry but want to keep the loan? Roll it. Rolling settles accrued interest, adjusts collateral, recomputes your borrow amount at current parameters, and resets your term — all in one transaction, same NFT.

**Note:** rolling snapshots the current governance rate. If the rate has increased since your original borrow, your rolled position uses the new rate.

## Key Risks

* **Collateral is burned, not escrowed.** If you default, there is nothing to recover. This is not typical DeFi collateral behavior.
* **No liquidation warnings.** No health factors, no margin calls. If your loan expires unpaid, full liquidation is instant and permissionless.
* **CDT is required.** You cannot borrow with STRAT alone — you need proportional CDT.
* **Rolling changes your rate.** Check current rates before rolling.
* **Delinquent fee is carved upfront.** A portion of your ETH backing is reserved at origination in case of default. On timely repayment, it returns to the protocol (not charged to you). On default, it's forfeited.

**Full breakdown:** [Risks](/security-and-risk/risks.md)

## Your Reading Path

1. [Treasury Lending](/core-mechanics/treasury-lending.md) — full mechanics, worked examples, and safety layers
2. [STRAT Staking](/core-mechanics/strat-staking.md) — where your interest payments go (to stakers)
3. [CDT](/core-mechanics/cdt.md) — why CDT is required alongside STRAT
4. [Risks](/security-and-risk/risks.md) — protocol-wide risk assessment


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