The lender is obliged to lock funds on the Protocol in order to submit active offers. Once an offer is accepted, the funds become unavailable to the lender until termination of the term loan. In the event of liquidation, the lender is obliged to absorb losses due to credit events and pay liquidation fee to the Protocol whenever applicable.
By entering into a term loan agreement, the borrower is obliged to lock the NFT Collateral on the Protocol until the loan and relevant charges are fully repaid. In the event of liquidation, the borrower will lose ownership of the NFT Collateral permanently. Each loan position is isolated and any credit event occurring to a loan position does not affect the status of any other loan that belongs to the same counterparty.