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Maturity

Overview​

In Morpho V2, positions have a defined maturity date that represents the end of the fixed-rate period between the lender and the borrower.

What Happens at Maturity?​

At the maturity date, if a user has not repaid their debt, their collateral can be soft liquidated to repay the outstanding debt ensuring the lender can withdraw his funds. This means:

  • The protocol can sell a portion of the user's collateral to cover the debt amount
  • The user retains any remaining collateral after the debt is settled
  • Unlike normal liquidations, while still not ideal this process is less punitive and can only happen post maturity

Avoiding Liquidation at Maturity​

To prevent soft liquidation at maturity, users must:

  1. Repay the full debt amount before the maturity date
  2. Renew their position to extend the lending period

Position Renewal Options​

Tenor provides tools to simplify position renewal, offering two main options:

Fixed-Rate Renewal​

  • Extend your position at fixed rate for a longer time period

Variable-Rate Renewal​

  • Convert to a variable rate position
  • Provides flexibility if liquidity for fixed rates is lacking or if fixed rates are superior to the user's maximum rate he's willing to borrow at.

Benefits of Tenor's Renewal Tools​

  • Automated renewal to prevent missed maturity dates and avoid liquidations
  • Seamless position management without manual intervention for ongoing borrowing needs