> For the complete documentation index, see [llms.txt](https://docs.gage.cash/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.gage.cash/start-here/how-it-works.md).

# How it works

One deal, three steps. What a borrower and the lenders each see from listing to the decision at expiry.

A deal on gage is a pledge with a fixed price on getting it back. Here is the whole thing, with the product's opening example: 12.5 NVDA, worth 2,280.00 USDG at listing. The figures are an illustration before protocol fees.

## 1 · List

The borrower opens Borrow, picks NVDA and goes through one card in four steps. It opens on the best loan a partner vault funds whole now; every figure can be changed.

* **1 Pledge.** How much NVDA to pledge: type it, drag the fader, or press Max.
* **2 Borrow.** How much to borrow, on a fader up to the most the collateral can carry.
* **3 Rate.** The term, 7 or 21 days counted from full funding, and the fixed cost, pre-filled with the model's suggestion as a percent for the term. Type your own, or press a letter of the Loan grade ladder.
* **4 Review.** The loan as a curve on its end date: keep the USDG, or pay the cap and take the NVDA back. The button reads **Get X USDG** when a partner vault funds the whole loan now, otherwise **List for X USDG**.

From these the card derives the reclaim amount, the cap: what the lenders fund plus the fixed cost. In the example the borrower receives 1,814.88 USDG and pays 1,824.00 USDG to reclaim. The NVDA moves into escrow when the listing is signed.

{% hint style="info" %}
A listing is not a loan until it is funded. It stays open for 24 hours.
{% endhint %}

Borrow's **Private** switch borrows against a screened deposit in a shielded pool, for a wallet you name: deposits, loan terms and positions are public onchain, the link between your deposit and your loan is not. Memes and RH ECO tokens only. See [Borrow privately](/borrow/private.md).

## 2 · Funded

Partner vaults fund the listing. When its terms meet a vault's rules and the vault has room, the whole loan is funded in one transaction, by one or more partner vaults, each taking one to four of its quarters, usually within minutes. If any part cannot be funded, nothing is. The loan starts at that moment: the USDG is credited to the borrower, less the origination fee, and the clock starts. Expiry is exactly 7 days from funding. Before funding the borrower can cancel; unfunded after 24 hours, the listing closes and the borrower takes the NVDA back.

The borrow card said so before listing: its button read **Get X USDG** when a partner vault funds the whole loan now, and its Loan grade ladder counted the partner vaults that fund it at each letter. Wallets lend through partner vaults on Earn; see [Partner vaults](/earn/partner-vaults.md).

The difference between the cap and what the lenders fund is the fixed cost: **9.12 USDG, 0.50% for 7 days**. It is fixed at funding and never changes. There is no rate that moves and no margin call.

Both sides receive sGAGE rewards only while the week's budget and posted rates allow; an allocation can be zero. Allocated rewards unlock over the term. See [The drip](/rewards/the-drip.md).

## 3 · You decide

Any time from funding to the end of the term, the borrower decides.

|                 | Reclaim                         | Walk away                                       |
| --------------- | ------------------------------- | ----------------------------------------------- |
| Borrower pays   | 1,824.00 USDG                   | nothing                                         |
| Borrower holds  | 12.5 NVDA again                 | the 1,814.88 USDG they received                 |
| Lenders receive | 1,824.00 USDG, split by quarter | 12.5 NVDA, split by quarter, when the term ends |

On the current engine, repayment closes when the term ends, and from that same second the lenders may claim the collateral. There is no race and no window in which only the borrower can act. Positions funded on the two earlier V2 engines keep a 48-hour grace window after the term; the position page shows each deadline.

Two other ways out sit at the foot of the borrower's loan card: **Or cash out**, which sells the collateral through a supported route, repays the cap and leaves you the rest, and, in the loan's last day, **roll over**, which repays the loan and borrows again on the same pledge, in one transaction. See [The decision at expiry](/borrow/the-decision.md).

What the collateral is worth at expiry decides which choice is sensible, and it is entirely the borrower's call:

| NVDA worth at expiry | A sensible borrower | Borrower ends with                         | Lenders end with    |
| -------------------- | ------------------- | ------------------------------------------ | ------------------- |
| 2,600.00             | Reclaims            | NVDA worth 2,600.00, minus 9.12 fixed cost | 1,824.00 USDG       |
| 2,280.00             | Reclaims            | NVDA worth 2,280.00, minus 9.12 fixed cost | 1,824.00 USDG       |
| 1,500.00             | Walks away          | 1,814.88 USDG                              | NVDA worth 1,500.00 |

## What never happens

* The contracts never sell collateral. There is no oracle in the deal path and no liquidation: nothing can touch your collateral before expiry; at expiry you choose.
* Nobody can move a user's collateral or USDG, delay a reclaim, or accelerate a claim. Not the team, not a multisig, not an upgrade. The vault contracts have no owner and no upgrade path. The registries that admit collateral and set bounds have an owner; a pause stops new deals only, and existing deals keep advancing.
* Anything owed to you is credited to a Gage balance you withdraw yourself, from Portfolio. Nothing is pushed to a wallet.

## Next

* [No liquidation, defined](/start-here/no-liquidation.md)
* [Two lanes: stocks and memes](/start-here/two-lanes.md)
* [The decision at expiry](/borrow/the-decision.md)


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