Core Advantages

CosmBank Flexi Loan introduces a fundamentally different lending architecture compared to traditional DeFi or CeFi systems.

It is built around protocol-controlled capital, fixed loan terms, and zero liquidation risk — unlocking a new category of predictable and safe borrowing.

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1. Protocol-Direct Lending (Pool-less Model)

• Loans are funded directly by the CosmBank Treasury, eliminating dependency on external liquidity providers.

• Every loan is overcollateralized by veCSM back by stablecoins, ensuring full solvency and eliminating systemic debt risk.

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2. Fixed Terms and Rates

• All loans come with fixed durations (e.g., 30 / 60 / 90 days). This structure avoids the risk of rollover spirals and unexpected term extensions.

• Interest rates are governance-defined, stable and predictable — unaffected by market volatility.

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3. Zero Liquidation

• Loans are backed by protocol reserves, not market price triggers.

• Even if veCSM’s implied value fluctuates, there is no forced liquidation.

• Users are only required to repay principal + interest at maturity. If they fail, collateral is smoothly claimed by the protocol.

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4. Oracle-Free

• All loans are issued based on a fixed collateral ratio (e.g., 120%).

• No reliance on external price oracles — removing a major DeFi attack vector.

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5. Isolated Risk Architecture

• Each borrower is assigned a dedicated Cooler contract, isolating their loan from the broader system.

• In case of default, only that specific contract is affected, preventing contagion like that seen in shared-pool models (e.g., Aave).

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6. Transparent, Predictable Loan Terms

• Loan parameters (maximum amount, maturity date, interest rate) are predefined by governance.

• No hidden fees, no dynamic interest spikes — fully on-chain and verifiable.

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7. Flexible Extension

• Before expiry, users may extend their loan term without re-collateralizing. This preserves their original terms and simplifies repayment management.

CosmBank Flexi Loan combines the predictability of traditional finance with the self-custody and transparency of DeFi — creating a new standard for permissionless stable lending.