# FAQ

**What is Stormbit?** A lending protocol where every loan is insured with put options. Borrowers get no-liquidation loans. Lenders earn yield from the spread on hedging activity.

**How is it different from other lending protocols?** Traditional DeFi lending liquidates your position when collateral drops below a threshold. Stormbit insures it instead. Loan terms are fixed duration — no mid-term liquidation. Yield comes from the spread on hedging activity and varies with borrowing volume and market conditions.

**Can I really not be liquidated?** Correct. Once funded, your collateral cannot be liquidated during the loan term — regardless of price movement. At maturity, you repay and get your collateral back. If you miss the deadline, collateral is sold via Dutch auction in [Deals](https://docs.stormbit.finance/product/deals).

**Why are rates higher than other protocols?** Stormbit's rate includes the cost of hedging your loan — that's the price of no-liquidation protection. The quoted rate is the ceiling. When you repay, unused hedge value is returned as a rebate, lowering your effective rate. Cheaper rates elsewhere come with liquidation risk.

**How do lenders earn?** Supply to specific lending markets and earn premiums from that market's loans. Idle funds also earn base yield. See [Earn](https://docs.stormbit.finance/product/earn) for details.

**Are lender deposits safe?** Deposits are protected by collateral + insurance down to the protection level. As collateral price drops, insurance picks up the difference. See [Risks](https://docs.stormbit.finance/protocol/risks) for edge cases.

**What happens if I don't repay?** Collateral is forfeited and sold via Dutch auction in Deals. Set a calendar reminder.

**What is the protection level?** The price floor where insurance covers the loan. Protection Level = Loan Amount / Collateral Units. Example: $75K loan, 1 BTC → $75,000/BTC.

**Can I withdraw anytime?** Unallocated funds: yes. Funds in active loans: locked until maturity. Use Exit Full Position to stop new allocations and wind down.

**What collateral is supported?** V0: WBTC (up to 80% LTV, 7-14 day terms) and WETH (up to 80% LTV, 7-14 day terms). More assets planned.