After maturity, any external account can call the settlePool function. When called, the protocol records the exchange rate between the Loan Token (e.g., cUSDC) and the Underlying Loan Token (e.g., USDC). For instance, if the exchange rate is 1.05 and a borrower has a 1000 fUSDC position, the borrower must repay 952.4 Loan Tokens (1000 USDC / 1.05), equivalent to 1000 USDC.
Lender Settlement
Lenders automatically start accruing the money market variable rate at maturity. They can set a flag in their account allowing to get automatically rolled forward to lend in a new maturity as long as the new rate clears a certain rate threshold (ex: Money market rate + X%, or a set rate). This simplifies position management and enables users to opt in to a passive lending experience.
Borrower Settlement
Post-maturity, borrowers with outstanding Fixed Rate Debt positions start paying the underlying money market interest rate plus a penalty according to a set schedule. Users can always flash settle their account back to the money market if they want to default back to the money market. If the underlying money market is illiquid such that a borrower's account can't be flash swapped, the borrower himself can always repay his position or can wait for the underlying money market to become liquid again.
They can also set a flag in their account allowing to get automatically rolled forward to borrow in a new maturity as long as the new rate clears a certain rate threshold (ex: Money market rate + X%, or a set rate). This simplifies position management and enables users to opt in to a passive borrowing experience.
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