PAY collateral
A user deposits PAY. The protocol values it with a fresh, conservative oracle price.
OPERATIONS MANUAL / REV 01
Debt Desk Manual
Protocol mechanics, operating limits, and risk controls for the PAY / BACK credit system.
BACK borrowing
The same transaction borrows up to 70% of that value in BACK. Borrowing requires sufficient reserve backing.
Reserve structure
The safe bootstrap assigns 51 BACK against 51 USDC: 50 BACK and 50 USDC seed the public pool, while 1 BACK and 1 USDC support keeper automation. Future borrowed BACK is debt secured by PAY collateral; this is not a permanent 50/50 reserve claim.
Repayment and redemption
Borrowers pay debt by burning BACK. Eligible reserve-backed BACK can instead be redeemed 1:1 for available USDC, subject to on-chain limits. Because redemption removes BACK liability and matching reserves together, it remains available during a safety pause or recovery.
Protocol revenue
Creator-fee SOL is collected by the dedicated keeper, swapped for BACK, moved into the repayment vault, and burned.
Automatic debt reduction
Each BACK burn reduces aggregate debt by exactly the burned amount. A multiplicative repayment index applies the same proportional reduction to every borrower.
Risk and liquidation
A position becomes eligible for liquidation at 90% LTV. Automatic repayment is variable and is never guaranteed.