> For the complete documentation index, see [llms.txt](https://docs.usefarlight.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usefarlight.com/introduction/readme.md).
# What Farlight is
A lending marketplace on Robinhood Chain where lenders and borrowers agree fixed-rate, fixed-term loans against tokenized real-world assets, with no custodian between them.
The Farlight mark: a line-drawn spacecraft.
Farlight takes its name from light that has crossed a great distance before anyone sees it. The protocol does two things that name describes: it brings capital and collateral together from far apart, and it makes every loan visible from a distance.
In practice it is a marketplace for loans that lenders and borrowers agree directly with one another. Each loan runs for a fixed term at a fixed rate and is secured by tokenized real-world assets. No custodian sits between the parties. Every step, from the first signed offer through fill, repayment, refinancing and, if it comes to that, liquidation, is written to Robinhood Chain, where anyone can read it. The Observatory, Farlight's public loan explorer, is where that record is laid out for reading.
Securities-backed lending is the first market. Private banks have sold this product for decades as a Lombard loan or a margin loan. On Farlight, a holder of Robinhood Stock Tokens (tokenized AAPL, NVDA, SPY and others) pledges them as collateral and borrows USDG from a single lender or a syndicate of several, at a rate the two sides negotiate themselves.
{% hint style="info" %}
The protocol is live on Robinhood Chain mainnet, chain ID 4663, and the platform runs at [usefarlight.com/platform](https://usefarlight.com/platform). Lending and borrowing are open to participants who have been verified as eligible. Nothing in these pages is investment advice.
{% endhint %}
## How a loan moves through the system
It starts with a borrow request. The borrower states the collateral, the principal wanted, the highest APR they will pay, the term, and a launch window, which is the deadline by which the request must be filled. Lenders respond with offers signed off-chain, each at whatever rate that lender chooses. Once enough offers cover the request, the borrower submits them to the contract in one transaction. The contract verifies every signature, confirms that each party is eligible, moves the collateral into escrow, sends USDG from each lender to the borrower, and mints a slice token recording each lender's share.
Interest then accrues at the fixed rate for the rest of the term. At maturity there are three exits. The borrower repays. Or the loan is rolled over through a rate auction that brings in new lenders. Or the borrower defaults and the collateral is sold in a Dutch auction. Lender capital that is still waiting for a match does not sit unused: it is placed in an existing Morpho money market until it is needed.
## Pooled markets and Farlight, side by side
| | Pooled RWA money market | Farlight |
| ------------------------ | --------------------------------------- | ------------------------------------------------------------ |
| Rate | Variable, set by a utilisation curve | Fixed for the term, agreed loan by loan |
| Term | Open-ended | Fixed, with a refinancing auction to roll it over |
| Eligible collateral | A curated, capped list of liquid assets | Any Stock Token that has an oracle price, long tail included |
| Risk | Shared across the whole pool | Held separately by each lender and each syndicate |
| Bad debt | Lands on every supplier | Lands on the lender who priced the loan |
| Capital awaiting a match | Earns the pool rate | Parked in a pool until a loan is matched |
| Recovery | Liquidation into DEX liquidity | Dutch auction with bounded floors, or settlement in kind |
Deep, liquid collateral suits a pool. Everything else fits it badly: single-name stocks, tokens with little DEX depth, weekends when the underlying market is shut, and tokens of private companies. Those assets need a price agreed per loan and a fixed term. That is the gap Farlight is built to fill.
## Key facts
| | |
| --------------- | ------------------------------------------------------------------------------------------------------------- |
| Network | Robinhood Chain, an Arbitrum Nitro L2, chain ID 4663 |
| Loan currency | USDG (Paxos Global Dollar) |
| Collateral now | Robinhood Stock Tokens |
| Collateral next | Long-tail Stock Tokens, then tokenized treasuries and fund shares (see the [Flight plan](/roadmap/phases.md)) |
| Loan structure | Fixed rate and fixed term, syndicated across as many lenders as it takes |
| Custody | None. Funds stay where they are until origination, and collateral is held by an immutable escrow contract |
| On default | A Dutch auction run by the smart contract. No legal process |
## What Farlight does not do
* Lend without full collateral. Uncollateralised and undercollateralised loans are excluded in every form.
* Run pooled vaults of its own.
* Pay out token emissions or prop up rates with them. The $FARLIGHT token exists, but revenue comes from explicit fees (see the [How Farlight earns](/resources/business-model.md)).
## Where to start
* New to Farlight: [Why the timing works](/introduction/why-now.md), then the [eight design rules](/introduction/design-principles.md).
* The mechanics: the [Loan lifecycle](/protocol/loan-lifecycle.md), then [Offers and matching](/protocol/offers-and-matching.md) and [Health factor and liquidation](/protocol/health-and-liquidation.md).
* Building or integrating: [System overview](/architecture/overview.md), [Smart contracts](/architecture/smart-contracts.md) and [Deployment](/architecture/deployment.md).
* Assessing risk: the [Risk framework](/risk/framework.md) and [Lessons from RWA lending](/risk/lessons.md).
* Using the platform: [For borrowers](/guides/borrowers.md), [For lenders](/guides/lenders.md), and the [Observatory](/guides/loan-explorer.md) for reading loans you are not a party to.
---
# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.
## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.
Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:
```
GET https://docs.usefarlight.com/introduction/readme.md?ask=&goal=
```
`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.
Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.
