> For the complete documentation index, see [llms.txt](https://docs.stormbit.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.stormbit.finance/resources/faq.md).

# FAQ

**What is Stormbit?** Structured options-backed credit. Every loan is a collar — a put and a short call written on the borrower's BTC or ETH at origination. Borrowers get USDC loans at 0% APR that settle on listed option expiries, with no liquidation. Lenders hold soUSD and earn the premium those collars generate.

**How is it different from other lending protocols?** Most DeFi lending manages risk by liquidating collateral when price crosses a threshold. Stormbit prices the risk into an options structure at origination instead: the put handles the downside, the short call pays for it. Loans settle on option expiries, there is no mid-loan liquidation, and yield comes from inside the trade rather than from rates or emissions.

**Why is the APR 0%? What's the catch?** The short call sold on your collateral funds the loan. The catch is stated at quote time: your upside is capped at the call strike for the term. If your collateral finishes above the cap, that part of the move settles to the desk. Below the cap, the move is yours.

**Can I really not be liquidated?** Correct. Once funded, your collateral cannot be liquidated during the term — regardless of price. The downside is handled by a put bought at origination, not by a margin monitor. At maturity, repay and your collateral comes back. Miss the deadline and it settles via Dutch auction in [Deals](/product/deals.md).

**What is soUSD?** The vault token lenders receive for depositing USDC. It accrues the premium income from the loan book and is redeemable for USDC after the tenor's unlock.

**Where does the lender yield actually come from?** The call premium written on every funded loan. It is priced when the collar is executed — not projected, not emitted. When implied volatility is rich, premiums are rich; when it compresses, yield compresses toward the floor mechanism.

**Is the yield guaranteed?** No. Targets are 10–16% APY by tenor with a floor mechanism, and the floor is a mechanism, not a promise — see [Risks](/protocol/risks.md). The pricing engine publishes its own error rate so you can judge the underwriting rather than take it on faith.

**Are lender deposits safe?** Each loan is over-collateralized and carries a put struck at or above the loan value. Above that floor, collateral covers the loan; below it, the put pays the difference. Edge cases live in [Risks](/protocol/risks.md).

**What happens if a borrower doesn't repay?** The put plus the collateral settle the loan, and remaining collateral is auctioned in Deals. The lender's principal is covered down to the floor.

**Can I withdraw anytime?** Unallocated funds: yes. Funds in active loans: locked until those loans settle. Deposits are tenor-based — pick the tenor that matches when you need the capital back.

**What collateral is supported?** WBTC and WETH, settling on listed option expiries — granular, from days to months out. More assets only when the desk can hedge them — collateral follows options liquidity, not the other way around.


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