Moonloop Protocol

Moonloop Protocol is an on-chain lending protocol built for recursive finance. It splits lending into three composable parts: lenders deposit into on-chain vaults that issue interest-bearing shares, borrowers pledge shares or positions to open a loan request, and underwriters provide credit enhancement on a single loan for a premium, with all three matched and settled inside one contract.

Unlike pooled lending, each loan is its own contract with collateral ratio, tenor, rate and underwriting share fixed at opening and unaffected by overall pool utilisation. Vault shares can themselves be pledged into the next layer of borrowing, which is where the recursion comes from, and the protocol caps nesting depth with layer limits and correlation checks. Liquidation runs per contract against parameters written at opening, and underwriters absorb an agreed share of the loss first when collateral falls short, letting capital with different risk appetites price in layers.