Frequently Asked Questions

Varla is a lending protocol purpose-built for prediction markets. It lets you borrow stablecoins against your prediction market positions (like Polymarket or Opinion) as collateral, or earn yield by supplying stablecoins to the lending pool.

Aave and Compound support fungible ERC-20 tokens as collateral. Varla is designed for ERC-1155 prediction market positions — which have unique properties like binary resolution ($0 or $1), time-bound expiry, and platform-specific formats. Varla's risk engine handles these with early-closure decay, conservative oracle pricing, and market adapters.

Currently Polymarket (Polygon) and Opinion (BSC). Kalshi integration is planned. Any ERC-1155-based prediction market can be integrated via the adapter system.

Depends on your collateral's risk tier: up to 80% LTV for Conservative tier positions, 65% for Moderate, and 50% for Risk. Your effective LTV is a weighted average across all deposited positions.

If your position resolves to $0, it has no collateral value. If you have outstanding debt, this creates bad debt. The protocol reserve fund absorbs it first; lenders are only affected if reserves are depleted.

Rates are floating and depend on pool utilization. At typical utilization (40-80%), expect borrow rates of 4-6%. Above 80% utilization, rates spike sharply. See Interest Rates.

Deposit stablecoins into VarlaPool. You receive vault shares. As borrowers pay interest, the share price increases — your shares become worth more stablecoins over time.

Yes, as long as the pool has available liquidity. If utilization is very high (near 100%), you may need to wait for borrowers to repay or for new lenders to supply.

The primary risk is bad debt from borrowers whose collateral becomes worthless. The reserve fund is the first line of defense. In extreme scenarios, losses could be socialized across all lenders.

Audits are scheduled for Q1 2026 and will be published on the Security & Audits page. Until then, use the protocol at your own risk.

The oracle uses min(spot, TWAP) pricing, staleness checks, and liquidity thresholds. Short-term manipulation is ineffective because TWAP smooths out price spikes. See Oracle System.