# Markets Overview

Fira is modular lending infrastructure. Each **market** is an independent instance with its own collateral, loan token, parameters, and risk profile.

## What Defines a Market

Every Fira market is defined by:

| Parameter                   | Description                                                          |
| --------------------------- | -------------------------------------------------------------------- |
| **Collateral asset**        | The token deposited by borrowers                                     |
| **Loan asset**              | The token borrowed against collateral                                |
| **Max LTV (Loan-to-Value)** | Maximum borrowing ratio                                              |
| **LLTV**                    | Liquidation LTV — the threshold at which positions can be liquidated |
| **Oracle**                  | Price feed determining collateral value                              |
| **Maturity**                | Term length for fixed-rate positions                                 |
| **Protocol fee**            | Fee charged by the protocol (in APR)                                 |
| **IRM**                     | Interest Rate Model governing rate discovery                         |

This modular design means Fira can support any pair of assets — stablecoins, yield-bearing tokens, LSTs, or governance tokens — each with parameters calibrated to the specific risk profile of that pair.

## V1 Market Types

Fira V1 introduces three market types, each serving different credit needs:

### Fixed-Rate Markets

Borrowers and lenders lock rates for a defined maturity via Bond Tokens (BTs). BTs trade at a discount before maturity on the fixed-rate AMM. The discount determines the implied rate.

> [Fixed-Rate Markets — Protocol](/protocol/fixed-rate-markets.md)

### Floating-Rate Markets

Variable-rate borrowing and lending without maturity constraints. Rates adjust dynamically based on utilization — similar to existing DeFi lending protocols, but integrated into Fira's infrastructure.

> [Floating-Rate Markets — Protocol](/protocol/floating-rate-markets.md)

### Dynamic Lending

LPs provide liquidity to the fixed-rate AMM while unused liquidity is rehypothecated to floating-rate vaults. LPs earn both trading fees and lending yield. Coupon Tokens (CTs) represent the yield portion and are tradable.

> [Rehypothecation](/protocol/rehypothecation.md) · [Fixed-Rate Markets — Protocol](/protocol/fixed-rate-markets.md) · [Floating-Rate Markets — Protocol](/protocol/floating-rate-markets.md)

## Related

* [Architecture Overview](/protocol/architecture-overview.md) — How markets connect to the broader system
* [Token Mechanics](/protocol/token-mechanics.md) — BT, CT, and FW token mechanics
* [Risk Framework](/security-and-risk/risk-framework.md) — How risk is assessed per market


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