Advanced

Technical documentation covering Lotus protocol mechanics including tranches, accounting, interest cascades, hooks, pre-liquidation, and IRMs.

Lotus is a permissionless tranched lending protocol for EVM chains.

Each market has a single loan token and multiple tranches ordered by risk from senior (least risky) to junior (most risky). Each tranche can have a unique liquidation loan-to-value (LLTV), collateral token, and oracle.

Unutilized liquidity from junior lenders is available to senior borrowers. Interest and bad debt cascade from borrowers to lenders across tranches based on utilization.

Quick links

• Markets & Tranches → how a market and its tranches are defined

• Core Interactions → supply, withdraw, borrow, repay, collateral

• Protocol Accounting → liquidity, utilization, interest and loss cascade

• Loan Health → oracles, health checks, and liquidation flow

• IRMs → adaptive/managed models and guardrails

• Flash Loans & Callbacks → atomic strategies

• Hooks → extension points for custom market logic

• Pre-Liquidation → soft liquidation before the LLTV threshold

• Lending Vaults → adapter behavior and constraints

• Admin → protocol controls and fees

• Math & Worked Examples → derivations and scenarios

For integration details and code, see Build.

Resources

Smart Contracts: https://github.com/Lotus-Protocol/lotus