III. Lending Process (Collateral Lifecycle)
1. Stake → Borrow
Users stake ARK to borrow corresponding assets
No market valuation or external Oracle required
2. Repayment → Unlock
Pay off principal and interest to retrieve all ARK
System applies payments to accumulated interest first, then to principal
3. Renewal Mechanism
Users can renew their loans up to 3 times within the term
Each extension period (e.g., 180 days) increases the interest rate by 0.5%
4. Liquidation Mechanism
Liquidation triggers when collateral value falls below:
Total debt × Liquidation ratio (default is 110%)
→ This initiates the auction phase
Liquidations may offer discounted bidding (e.g., 8% discount)
If auction fails → ARK assets are recovered into the treasury
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