# Lending

## What is Fixed-rate Lending?

When you engage in fixed-rate lending on Spine Protocol, you interact with BondMM, our automated market maker (AMM). Lenders will swap USDC into the liquidity pool in exchange for [sUSDC](https://spine-protocol.gitbook.io/spine-finance/key-mechanisms-and-glossary#susdc-spine-usdc) tokens that are redeemable on Spine Protocol at maturity for their value. For example, if lenders exchange 110 USDC for sUSDC, they are redeemable for 110 USDC + a fixed amount of interest at maturity.

When lenders trade these sUSDC tokens, lenders receive more than the amount they lent. For instance, lenders might receive 110 sUSDC in exchange for 100 USDC. The additional 10 sUSDC represents the fixed amount of interest lenders will earn until the bond's maturity. This ensures a predictable and stable return on your investment.

Watch our video to see how simple it is to lend through Spine: [**LENDING GUIDE.** ](https://spine-protocol.gitbook.io/spine-finance/product-video-guides/lend)

## Who is Fixed-rate Lending designed for?

Fixed-rate lending via Spine Protocol is designed for DeFi users who seek straightforward access to a guaranteed yield. By locking in your rate, you secure a stable yield until maturity. Spine Protocol offers a constant yield, even for long-term maturity.

## What happens at maturity for lending?

When your fixed-rate loan matures, the accrued interest and the initial principal can be redeemed by trading in your sUSDC position.&#x20;

There is no deadline for claiming lending positions. Users can wait as long as they want before entering a new position or withdraw their profits.&#x20;

## Can I exit my positions before maturity?

Spine Protocol allows for users to exit their lending position prematurely. This means users can sell their sUSDC position back to the lending liquidity pool at market rates, this mean that users can incur a loss or profits from their initial position based on the difference between market rates and the rate users entered their lending positions.&#x20;

If you choose to sell your bond before the maturity date, a small fee will be applied. This fee is designed to compensate for the early termination of the lending agreement. You will receive a notification confirming the details of the maturity before final transation. No fee is applied at maturity.

## Transaction fees?

When you engage in fixed-rate lending by purchasing sUSDC tokens on Spine Protocol, a fee applies. This fee is calculated as a percentage of the total interest accrued until the maturity of the tokens and is designed to be lower for shorter-term lending. For example, lending 2,000 USDC fixed for one year at 4% might result in a fee of 3 USDC, while a six-month term would only incur a fee of 1.5 USDC.

{% hint style="info" %}

```
Transaction_fee = basis_point * time_to_maturity
```

{% endhint %}

The basis point will be calculated by our [BondMM](https://spine-protocol.gitbook.io/spine-finance/resources/developers) mechanism, the concept of basis point is to keep the transaction fee always above zero. Spine offers a competitive transaction fee, fair for traders and liquidity providers.
