Penalties

Triggers

• Any repayment delay from 1 up to 89 days enters the penalty stage.

• A delay of 90 days or more is treated as a default (see Default).

Penalty Calculation

Let:

• I_base:​ the loan’s nominal APR.

• mult: penalty multiplier (e.g. 2–4×).

• d: days of delay.

• t = d/365:​ delay expressed in years.

• C_nom: CT token face value (the principal-per-token amount)

Enhanced rate

Penalty amount

Example

For I_base = 30%, I_d = 30, mult=3, Cnom​=1,000:

Payment options

Penalties may be settled in:

• USDС, or

• $8LENDS, using the average mint price from the bonding-curve contract (see P_average) Projects can also use any $8LENDS received via Proof of Reputation to cover penalties (see Proof of Reputation).

Distribution of Collected Penalties

• Platform commission is applied to all penalty payments (see “Fees”).

• The net amount is pooled into the Lending Pool.

• Allocation is done evenly by CT face value across High, Middle, and Low priority tokens, ensuring every CT-holder shares proportionally in the penalty proceeds: