Fixed-Rate Lending
Fira enables fixed-rate borrowing through a lending market where BT serves as the loan token, giving borrowers predictable costs.
Overview
Fira's fixed-rate lending allows borrowers to post collateral and borrow at a known, fixed rate. The mechanism works by using Bond Token (BT) as the loan token in a dedicated lending market. Since BT is redeemable for a known value at maturity, the borrowing cost is determined by the BT discount at the time of borrowing.
The fixed-rate lending market has no interest rate model (IRM = address(0)). The rate is implicit in the BT discount — the difference between the BT price at borrow time and its face value at maturity is the borrower's fixed cost.
How it works
Borrowing
The router's supplyAndBorrowSingleToken function handles the full flow in a single transaction:
Supply collateral — Collateral tokens (e.g., Pendle PT tokens) are deposited into the lending market
Borrow BT — BT is borrowed from the lending market (supplied by the LiquidityInjector)
Swap BT → FW — BT is swapped to FW via the Fira Market AMM
Redeem FW → USDC — FW is redeemed for the desired output token
The borrower receives USDC (or another token) and holds a fixed-rate debt position denominated in BT.
Repaying
Pre-expiry: Input token → FW (mint) → BT (AMM swap) → repay lending market.
Post-expiry: Input token → FW (mint) → BT+CT (mint via CT contract) → repay with BT. CT is minted but has zero economic value post-expiry.
Collateral types
Fixed-rate markets currently support Pendle Principal Tokens (PT) as collateral:
PT-USDe (Ethena USDe, May 7 2026 expiry)
PT-sUSDe (Ethena sUSDe, May 7 2026 expiry)
PT-USDG (Paxos USDG, May 27 2026 expiry)
Liquidation
Positions that fall below the liquidation LTV (LLTV) can be liquidated. The liquidator repays part of the debt and receives collateral plus a liquidation incentive.
Key features
Predictable costs — Fixed rate determined at borrow time
Single-transaction flow — Collateral supply, BT borrow, swap, and redemption in one call
Whitelist-gated supply — Only the LiquidityInjector can supply BT to fixed-rate markets
Maturity grace period — 24-hour grace period after BT expiry before liquidations are enforced
Related pages
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