FAQ

General

What are Vanilla Markets?

Felix Vanilla Markets are lending pools built on the Morpho stack. They let users borrow or lend tokens such as USDC, HYPE, and UBTC against over‑collateralised positions, all with floating interest rates derived from pool utilisation.

How are they different from the CDP Market / feUSD?

• Asset‑native borrowing — you can borrow any token, not just feUSD.

• No redemption mechanics — therefore no borrower‑set fixed rates.

• Lower max‑LTV and variable APRs that adjust block‑by‑block.

Why borrow through Vanilla instead of the CDP?

If you need direct exposure to a specific asset (e.g., HYPE to stake or USDC to LP) and don’t want redemption risk or swap slippage, Vanilla is simpler.

When do I need to repay my loan?

Loans are open‑ended; interest accrues continuously. You may repay at any time or maintain the position indefinitely as long as your Health Factor stays above 1.

Interest Rates

How are borrow and supply rates determined?

Vanilla Markets follows a utilisation curve. As Utilisation = Borrows / Supply rises, Borrow APR increases and Lender APY tracks it minus a small spread.

Liquidations

How do liquidations work?

If your Health Factor drops below 1.00, any liquidator can repay your debt and seize collateral at a discount. The process repeats until HF ≥ 1.

How can I avoid liquidation?

• Keep HF > 1.25 for a cushion.

• Add collateral or repay debt when collateral prices fall.

• Use on‑chain alerts or an automation service.

Lenders

Where does the lender yield come from?

Purely from borrow interest.

Can I withdraw anytime?

Yes, but if utilisation is high the contract may queue your withdrawal until enough borrows repay or new supply arrives.

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