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Seven steps.
That is the protocol.

1. 01

   Lock

   A position opens by locking $PEGBACK. The protocol values the deposit with a fresh oracle price and takes the conservative side of it, so a thin book cannot flatter a position into existence.

2. 02

   Draw

   The same transaction draws up to 70% of that value in USDC. The draw comes out of the protocol's lending reserve, and a draw that would leave the reserve short simply does not go through.

3. 03

   Debt

   What you draw is recorded as debt against your own collateral. It is a claim on your position and nothing else — no borrower's balance is ever collateral for another borrower's draw.

4. 04

   Repay

   You can close the balance at any time by paying USDC back into the vault. Repaying frees collateral in proportion, and releasing collateral is only allowed while what remains still covers what is owed.

5. 05

   Revenue

   Creator fees earned by the protocol are collected by a keeper, swapped to USDC, and deposited into the repayment vault. That deposit is the entire source of automatic repayment — there is no yield promised from anywhere else.

6. 06

   Reduction

   Each deposit into the vault reduces aggregate debt by exactly what it holds, applied as a proportional index across every open position. A borrower with 2% of the book's debt receives 2% of the reduction.

7. 07

   Liquidation

   A position becomes eligible for liquidation once debt reaches 90% of collateral value. Automatic repayment moves that line further away over time, but it is variable, it depends on protocol revenue, and it is never a guarantee.