For Borrowers

Guide for borrowers — access ETH liquidity from your STRAT position without selling, at fixed rates with no liquidation during the term.

Status: Roadmap — Q2 2026. Treasury Lending is not yet deployed. This guide describes the planned mechanics so you can evaluate the product before launch.

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 terms)	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

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 as a default penalty. On timely repayment, it returns to the protocol (not charged to you). On default, it's forfeited.

Full risk breakdown: Risks

Your Reading Path

1. Treasury Lending — full mechanics, worked examples, and safety layers

2. STRAT Staking — where your interest payments go (to stakers)

3. CDT — why CDT is required alongside STRAT

4. Risks — protocol-wide risk assessment