Liquid Loans — a vault that does not charge interest
Liquid Loans
ETH on Base, PLS on PulseChain
A Liquid Loans vault is how you keep the coin and still spend against it. Base takes ETH. PulseChain takes PLS. The vault mints USDL, which the system prices as one dollar of that collateral. Nothing compounds. You owe the USDL you minted, plus a one-time fee taken when you draw, and you repay when you decide to unlock the coin.
The fee sits between 0.5% and 5%. A 200 USDL liquidation reserve is added to the debt and handed back if the vault is closed by repayment rather than by liquidation. You cannot draw less than 2,000 USDL, and you cannot draw so far that collateral drops under 110% of the debt. LOAN is the second token. It does not vote. People who deposit USDL in the Stability Pool earn it, and people who stake it take a cut of borrow fees and redemption fees.
After deployment the rules are fixed. There is no admin key that can rewrite the ratio or the fee floor. Halborn audited the contracts. Base is the PulseChain system pointed at a different oracle and a different exchange. This paper is the vault, the pool, the peg, and the steps for opening a position that can survive a price drop.
USDL, LOAN, and the coin you lock
USDL on Base is not USDL on PulseChain, and the same is true of LOAN. Redeeming on Base pays ETH. Redeeming on PulseChain pays PLS. Neither redemption is a withdrawal from a bank.
- USDL stays near a dollar for three reasons: every vault is over-collateralized, anyone can redeem one USDL for a dollar of collateral, and a rising issuance fee slows new minting after a wave of redemptions.
- LOAN is capped at 5.5 trillion on each chain. Staking it collects fees. It does not insure the debt and it does not govern the contracts.
- Collateral is ETH on Base and PLS on PulseChain. Nothing else is accepted on that deployment.
You can borrow, deposit USDL into the Stability Pool, stake LOAN, redeem USDL for collateral, or buy cheap USDL and redeem it. Pool mechanics are on the Stability Pool page. The token is on the LOAN page.
Opening, drawing, and closing
One address, one vault. The vault stores collateral on one side and USDL debt on the other. Adding collateral or repaying debt is allowed at any time. Paying the debt off completely is free of the redemption fee. Minting more is not.
- Deposit the native coin of the chain you are on, and keep some of it for gas.
- Draw down to 110%. The reserve and the fee come out of what you receive. A 4,000 USDL draw at a 0.5% fee pays the borrower 3,781 USDL.
- Leave a gap. Ten thousand USDL of debt needs $11,000 of collateral to sit on the line, and $15,000 to sit at the 150% mark that Recovery Mode respects.
- Repay, or don’t. There is no calendar. A liquidation or a redemption can still move the vault while you are away.
Liquidation under 110% leaves you the USDL already in your wallet and takes the collateral. Right on the line, that is a 9.09% dollar loss, because 110 of collateral backed 100 of debt. The liquidator is paid 200 USDL plus 0.5% of the collateral, and anyone may send the transaction. The Stability Pool burns USDL to cancel the debt and takes the collateral. An empty pool pushes both the debt and the collateral onto the other vaults.
| While the system is healthy | Recovery Mode | |
|---|---|---|
| System ratio | 150% or higher | Under 150% |
| Liquidation line | 110% | 150%, and only if the pool can pay the debt |
| Fee to mint | 0.5% to 5% | 0%, and the new debt cannot weaken the system further |
| At 150% or above | Safe from a ratio liquidation | Left alone |
Recovery Mode tightens the rules so the system can climb back over 150%. It does not freeze withdrawals of a healthy vault. A position caught between 110% and 150% can be closed, and the borrower can still claim collateral above 110% of the debt. Redemption fees stay where they are. Only the borrow fee goes to zero.
The pool, the stake, and redemptions
Stability Pool depositors are the first buyers of liquidated collateral. Their USDL is burned in proportion to the debt, and the collateral is shared in the same proportion. A close just under 110% should leave them ahead in dollars, and they may sell the ETH or PLS immediately. They also accrue LOAN. The only time a withdrawal waits is while some vault is already under 110% and not yet liquidated.
A close under 100% — a crash, or an oracle print that is wrong — can leave depositors with less collateral than the USDL they lost. Base prices ETH with Chainlink and falls back to Tellor if Chainlink is four hours stale, reverts, or jumps more than 50% between updates. PulseChain prices PLS with its own feed.
Stake LOAN and you are paid, at the moment a fee is charged, your fraction of borrowing fees and redemption fees in USDL and in collateral. Unstaking is immediate. Team and advisor LOAN is locked: a full year on PulseChain, a monthly slice during the first year on Base. The address that can move those tokens into lockups cannot change the protocol.
Anyone holding USDL can redeem it for a dollar of collateral minus baseRate + 0.5%. The collateral comes from the lowest-ratio vaults first. Their debt shrinks by the same dollars, so the owner loses exposure, not net value, on that slice. Debt In Front is everyone riskier than you. Redemptions stop if the whole system falls under 110%, and they are off for the first 14 days after deployment. Paying your own debt is not a redemption.
One base rate drives both fees. Redemptions raise it. Quiet time lowers it, down to a 0.5% floor, or to zero on borrows during Recovery Mode. Borrows never pay more than 5%.
The two markets around it
9,325 or more wallets have connected, without an account. 6,635 or more have staked. 1,578 or more have held a vault. Minted USDL is above $6.1 million, and fees earned by users since launch are above $11 million. Over one 12-month window a vault read 31.0%, gold 28.0%, and a high-yield savings account 4.6%. The vault number includes the collateral’s own price move.
On PulseChain, USDL trades against WPLS on PulseX. On Base, it trades against ETH on Uniswap. Those pools are not the redemption. PulseX, Piteas, and PulseSwap move other tokens on PulseChain. USDL is not PLS and it is not bridged USDC. Both deployments’ addresses are on the contracts page.
Using a vault
- Choose Base or PulseChain before you deposit. The positions do not share collateral or token contracts.
- Fund gas and a draw of at least 2,000 USDL after the reserve and the fee.
- Stop above 150% if you want the vault to survive Recovery Mode. 110% is the edge, not a target.
- Watch Debt In Front. Redemptions walk up from the weakest vault.
- Pick a side. The vault is the borrow. The Stability Pool is the liquidation. Staked LOAN is the fee share.