How it Works
The 4-Step Flow of an Intent
The Intent Lifecycle
IRIS adopts the intent-centric model pioneered by protocols like CoWSwap and UniswapX. When a borrower wants a fixed-rate loan, they do not interact with a static liquidity pool or accept a globally uniform rate. Instead, they define their ideal parameters, and a competitive market of solvers prices their specific request.
1. Define Intent
The borrower signs a computationally inexpensive EIP-712 message specifying their exact loan requirements. This includes the collateral asset and amount, the desired borrow asset and amount, the exact duration of the loan down to the second, and a maximum acceptable fixed rate ceiling.
2. Sealed-Bid Auction via RFQ
The intent is instantly broadcast to a network of registered Solvers via the protocol's high-performance off-chain RFQ (Request for Quote) Coordinator server. Solvers use proprietary quantitative models to evaluate the intent, price the exact duration and utilization risk, and submit competing, cryptographically signed rate bids. The RFQ acts as the orchestration layer, ensuring a tight ~5-second window for true price discovery.
3. Solver Underwriting & Bidding
The RFQ Coordinator automatically selects the optimal rate (the lowest APY submitted) and returns this winning quote to the borrower. The winning solver commits a portion of their deposited bond capital to guarantee this rate against future volatility if accepted.
If a solver wins but their quote expires or they fail to provide the capital, they are subjected to exponential cooldown penalties.
4. Borrower Settlement (120s Window)
Because the borrower must explicitly agree to the final rate, the borrower has a 120-second window to review the winning quote. If it makes financial sense, the borrower signs and executes the final on-chain settlement transaction.
This atomic transaction deploys an isolated LoanPod, safely deposits the borrower's collateral, initiates the variable-rate loan on the venue (e.g., Aave V3), and delivers the borrowed principal directly to the borrower's wallet. If the borrower does not find the rate acceptable, they simply let the 120s window expire harmlessly.
Post-Settlement Management
For the duration of the loan, the borrower enjoys a strictly fixed rate. Behind the scenes, the solver actively manages the debt. If better variable rates become available on competing venues (e.g., Morpho), the solver may atomically migrate the debt to capture the spread, a process tightly restricted by the protocol's security invariants to ensure borrower collateral is never put at risk.
At maturity, the borrower repays the agreed-upon fixed principal and interest. The protocol routes the variable portion to the underlying venue to close the active debt, and any remaining positive spread is claimed by the solver as profit. If the variable rate exceeded the fixed rate, the deficit is paid directly out of the solver's locked bond. Should a solver fail to maintain sufficient bond to cover these deficits, or if a loan extends past its maturity date, the protocol protects the borrower via the Fallback & Expiration mechanism.
Last updated Mar 30, 2026
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