Deposit LP
The collateral adapter verifies the position and transfers it to a market-specific PDA-owned token account.
THE PROTOCOL / LP-BACKED CREDIT
KEEP THE LP.
ACCESS
THE CAPITAL.
Borrow against LP against an eligible PumpSwap LP position in a market with its own collateral policy, capital and debt limit.
01 / WHAT ENTERS THE SYSTEM
AN LP YOU OWN.
A POOL WE CAN VERIFY.
V1 targets reviewed, graduated PumpSwap markets with a supported quote asset. The borrower must own transferable LP tokens and place them in program custody.
The registry verifies the canonical pool, LP mint, token programs, physical reserves and withdrawal accounting. It rejects unsupported extensions, invalid ownership, frozen assets and inaccessible LP.
A project's name or market cap is not collateral. Neither is a position represented by LP tokens the borrower cannot transfer and redeem.
02 / THE LOAN STATE MACHINE
DEPOSIT. DRAW.
REPAY OR LIQUIDATE.
Draw credit
The lending ledger accrues interest, checks collateral and caps, then transfers available the quote asset to the borrower.
Manage health
Add collateral or repay debt. New borrowing and collateral withdrawals require a fresh risk check.
Close or liquidate
Repay to release collateral. If unhealthy, a liquidator may repay debt in exchange for a bounded LP seizure.
03 / EACH MARKET HAS A BOUNDARY
ISOLATE THE BOOK.
LIMIT THE CONTAGION.
Isolation is an accounting and permission boundary. It is not protection from a shared software exploit.
Dedicated capital
Market-specific Market-asset vaults and lender shares; no default cross-market borrowing or guarantee.
Dedicated risk
Each pool has admission criteria, utilization limits, valuation rules and a maximum outstanding debt.
Explicit losses
Bad debt remains in its market. A separately approved buffer contribution is capped and never assumed.
04 / PROGRAM BOUNDARIES
FOUR CONNECTED
CONTROL LAYERS.
| Module | Responsibility | Critical constraint |
|---|---|---|
| Pool Registry & Adapter | Pool identity, LP custody, withdrawal entitlement | Use pool accounting; reject inaccessible LP |
| Credit Ledger | Market-asset vault, debt shares, lender shares, interest index | Accrue before state changes; conservative rounding |
| Risk & Observations | Reserve observations, haircuts, caps, freshness | No borrowing on stale or insufficient data |
| Liquidation Engine | Debt repayment, collateral seizure, deficit recognition | Atomic state transitions; bounded incentives |