# hLend: Lending Market on Haven1 ## hLend: Lending & Borrowing on Haven1 A publicly available, permissioned, yet decentralized lending market on Haven1, built from the battle-tested Aave v3 and adapted to Haven1’s network-enforced security model. *** ### Quick links * **hApp**: [lend.haven1.org](https://lend.haven1.org/) * **Prerequisites**: Connected Wallet, funds bridged to Haven1, 2FA Wallet Shield \[recommended] * **Docs you may want nearby**: Network‑level security, Oracles on Haven1, Application fees, DeFi lending how-tos *** ### Glossary * **aH1hToken:** Interest‑bearing token that represents a supplied asset. * **Variable debt token:** Token that tracks variable rate borrowing per reserve. * **LTV:** Loan‑to‑Value, max borrowable portion of collateral value. * **Liquidation threshold:** Borrow value that triggers liquidation against collateral value. * **Liquidation bonus:** Extra collateral received by a liquidator. * **Reserve factor:** Treasury share of interest. * **Supply cap / Borrow cap:** Limits for supply or debt in a reserve. * **Isolation mode *****(currently disabled)*****:** Collateral type that can only back selected stablecoin debt. * **E‑Mode *****(currently disabled)*****:** Efficiency mode for correlated assets that increases capital efficiency. * **Health Factor:** Solvency buffer of a borrowing account. HF above 1 is required to avoid liquidation. *** {% hint style="warning" %} ### Important Disclaimer Use of hLend carries significant risks, including the potential of partial or total loss of digital assets. Participation is entirely at your own discretion and responsibility. Haven1, its affiliates, contributors, validators, and partners accept no liability for any financial, technical, or regulatory outcomes. Nothing here constitutes investment, legal, tax, or other professional advice. {% endhint %} ### What is hLend hLend is a pooled supply and overcollateralized borrowing protocol. Suppliers deposit assets into shared reserves and start earning. Borrowers can draw liquidity against their deposited collateral, within risk limits that are set per asset and enforced by the protocol. #### Permissioned, yet decentralized by design * **Market creation:** Only Haven1 governance can list or modify markets. Assets, parameters, and risk controls are onboarded through Haven1’s internal review and governance processes. * **User access:** Transactions require hPassport Lite, which every wallet receives automatically when connecting. All funds pass AML screening through Network Guardians. In the future, certain markets or assets may be ring‑fenced and require hPassport Full (identity‑verified). * **Operational controls:** Emergency pause, caps, and other circuit breakers are available and may be used to protect users. #### How hLend differs from vanilla Aave v3 * **Curation:** No public listings. Only approved assets and configurations. * **Protections:** monitoring by Network Guardians, asset screening and optional 2FA on wallets. * **Oracles:** Price feeds are provided through Haven1’s oracle framework in partnership with Redstone and are selected for each listed asset. * **Market Access Restrictions (coming soon):** hPassport can seamlessly allow (or disallow) market access based on user parameters *** ### Core concepts #### Reserves Each listed asset has a reserve with configuration that defines collateral use, interest model, and risk limits. **Key parameters** * **LTV (Loan‑to‑Value)**: Max portion of collateral value you can borrow under normal conditions. * **Liquidation threshold**: The portion of collateral value that, if reached by debt, makes the position liquidatable. * **Liquidation bonus**: Extra collateral given to liquidators when they repay part of a borrower’s debt. * **Reserve factor**: Portion of interest that is directed to the reserve treasury. * **Supply cap** and **Borrow cap**: Upper bounds on total supplied or borrowed amounts for a reserve. * **Collateral enable**: Whether a supplied asset can be used as collateral. #### **aH1h**Tokens and debt tokens * **aH1hTokens**: Interest‑bearing tokens minted to suppliers that track your claim on the reserve. * **Variable debt tokens**: Track a borrower’s variable‑rate debt per reserve. #### Alternate Modes (Currently Unavailable/Disabled) * **Isolation mode** (if enabled for an asset): Asset can be used as collateral to borrow only specific stablecoins, within a per‑user debt ceiling. * **E‑Mode** (if enabled for a category): Higher efficiency when you supply and borrow within a correlated asset class, such as stablecoins or ETH‑like assets. #### Health Factor (HF) Safety metric for a borrowing account. When **HF ≤ 1 (less than or equal to)**, the position becomes eligible for liquidation. At a high level: ``` HF = (sum over collateral: value × liquidation_threshold) / (sum over borrows: value) ``` **🚩 Keep HF comfortably above 1 to avoid liquidation**, especially during volatile markets. *** ### What you can do in hLend #### Supply 1. Select a listed asset and click **Supply**. 2. Approve the token if this is your first time. 3. Confirm the supply. You start accruing interest immediately and receive aTokens. 4. Optional: toggle **Use as collateral** where the asset allows it. #### Withdraw 1. Choose the asset in **Your supplies** and click **Withdraw**. 2. Enter an amount. You can withdraw up to your aToken balance, minus any amount needed to keep your HF above 1 and subject to available liquidity in the reserve. #### Borrow 1. Supply collateral first and enable it as collateral. 2. Go to **Borrow**, choose an asset, and enter the amount. Stay within the suggested safe range. 3. Confirm. Your HF will decrease as you borrow. #### Repay 1. Choose the borrowed asset and **Repay** using the same asset, or via supported repay‑with‑collateral flows if available. 2. After repayment, your HF increases, and interest stops accruing on the repaid portion. #### Manage collateral * Toggle **Use as collateral** per asset when supported. * Enable **E‑Mode** when your supplies and desired borrows fit an available category. *** ### Interest rates **hLend uses a utilization‑based variable rate model.** * **Utilization**: borrowed liquidity divided by total supplied liquidity. * **Two‑slope model**: * Below the optimal utilization, borrow rates rise slowly. * Above the optimal point, borrow rates rise faster to attract more supply and reduce demand. * **Liquidity rate**: derived from the variable borrow rate and reserve factor, it is what suppliers earn. Rates update on interactions and accrue continuously on your positions. *** ### Risk controls and protections #### Oracles Each reserve uses a specific price feed selected by Haven1 with monitored deployment through the permissioned deployment review. Prices are used for collateral valuation, health factor, and liquidations. #### Caps and freezes * **Supply cap**: limits how much of an asset can be supplied. * **Borrow cap**: limits how much can be borrowed. Caps can be tightened during stress. * **Freeze**: temporarily disables new supply or new borrows on a reserve. Existing positions can usually be repaid or withdrawn, subject to HF and liquidity. #### Isolation mode (Currently Disabled) If configured, an isolated collateral can only back borrows of selected stablecoins, and up to a per‑user debt ceiling. #### E‑Mode (Currently Disabled) If configured, E‑Mode allows higher LTV and liquidation thresholds for correlated asset categories. Switch on E‑Mode only if you understand the correlation risk. #### Liquidations If your **HF ≤ 1**, liquidators can repay a portion of your debt and seize collateral with a liquidation bonus. A variable close factor may apply near insolvency. #### Operational controls Haven1 can pause individual actions or entire reserves, adjust parameters, or delist assets when needed to protect the protocol. *** ### Fees, incentives, and costs * **Supplier earnings**: From the liquidity rate of the reserve. * **Borrower cost**: Variable borrow APY plus any platform or application fees shown in the UI. * **Network and application fees**: Haven1 uses an application fee framework. Some actions may include a dollarized fee in H1. Fees are shown before you confirm. * **Supply & Borrow Boosts:** Haven1 may incentivize certain markets for a set period of time with H1 tokens from the community & partner incentives allocation. *** {% hint style="warning" %} ### Risk Disclosure The use of hLend involves significant risks. By interacting with the protocol, you acknowledge and accept the following: * **Loss of Assets:** Participation may result in partial or total loss of your digital assets. You should never deposit funds that you cannot afford to lose. * **Smart Contract & Technical Risk:** hLend operates through smart contracts and supporting infrastructure that may contain vulnerabilities or experience failures. Transactions are typically irreversible. * **Market & Liquidity Risk:** Volatility in digital asset prices, insufficient liquidity, or unexpected market events may impact your ability to borrow, repay, or withdraw. * **Regulatory Risk:** The legal status of digital assets and DeFi protocols varies across jurisdictions and may change at any time. You are solely responsible for ensuring compliance with applicable laws. * **User Responsibility:** All decisions to supply, borrow, or otherwise interact with hLend are made at your own discretion and responsibility. * **No Liability:** Haven1, its affiliates, contributors, validators, and partners accept no liability for any financial, technical, operational, or regulatory outcomes. * **No Advice:** Nothing in this documentation, on the website, or in connection with hLend constitutes financial, investment, legal, tax, or other professional advice. By using hLend, you confirm that you understand these risks and accept full responsibility for any outcomes. {% endhint %} ### Getting started checklist 1. **Connect Wallet:** Connect your wallet using one of the supported wallet extensions (this automatically issues hPassport Lite). 2. **Bridge assets:** Use hBridge or supported on‑ramps to bring funds to Haven1. 3. **Open hLend:** Supply an approved asset, enable collateral, and borrow within safe limits. 4. **Secure your wallet (optional, recommended):** Enable the 2FA Wallet Shield for extra protection on withdrawals and approvals. *** ### Market listing and changes #### Initial Supported Assets * hUSDC * hUSDT * hETH * hBTC #### New Markets & Listing Procedures * Asset onboarding, parameter updates, caps, and pauses are controlled by Haven1 governance. * Listings follow internal risk review, oracle validation, and simulation. * Changes are announced in release notes or app banners when relevant. *** ### Security posture * Mandatory audits for protocol code and upgrades. * * * * * * * * * * Permissioned smart contract deployment, market and asset creation * AML enforced markets with hPassport Lite required and additional identity parameters on * specified transactions. * Continuous monitoring by Network Guardians. * Oracle quality controls and anomaly detection. * Emergency response procedures, including pausability and parameter changes. *** ### FAQs **Can anyone list a new asset or market?** No. Asset and market listings are permissioned and curated by Haven1 governance. **Do I need to verify my identity?** Not currently. You do need a valid hPassport Lite to transact on Haven1. Apps, markets and assets may have additional requirements. **What is a safe Health Factor?** Keep HF well above 1. Many users target 1.5 to 2 or higher, depending on volatility. **Are flash loans available?** Flash loans are currently disabled by default with higher LTV requirements to protect liquidations. If enabled for a market, the app will show the option and limits. **Why can’t I borrow more?** You might be at your LTV limit, your asset may be isolated, caps may be reached, or E‑Mode is off. **Why can’t I withdraw?** There may be insufficient unborrowed liquidity in the reserve, or withdrawing would drop your HF to 1 or below. **What if the Oracle is compromised or manipulated?** Haven1, in partnership with Redstone, uses permissioned, approved feeds that can provide data to the protocol, reducing the risk of malicious inputs. In addition, Network Guardians perform continuous anomaly detection on price data. If manipulation is detected, Haven1 can pause markets, switch feeds, or adjust parameters to protect users. **What happens if collateral no longer covers the debt?** In lending markets there is always a risk that collateral value drops below debt. When collateral weakens and debt is no longer considered healthy, liquidators have an incentive to step in. On other chains, automated bots and flash loans are often used to liquidate positions before they become unrecoverable. Haven1 does not support flash loans. Instead, the solution is external debt monitoring, where users or Haven1 can manually call the smart contract to repay bad debt and restore balance *** ### Developer notes * hLend is API and contract compatible with Aave v3 patterns for reads and most writes, adapted to Haven1 addresses and access controls. * Integrate with Haven1 oracles and respect reserve configuration when building on top of hLend. * Test on the Haven1 test environment before mainnet.