> ## Documentation Index
> Fetch the complete documentation index at: https://docs.iris.credit/llms.txt
> Use this file to discover all available pages before exploring further.

# What backs your fixed rate

> The capital a solver puts behind your quote, why it holds, and what happens in the rare case it does not.

A fixed rate sitting on top of a floating market only means something if someone is absorbing the difference. On IRIS that someone is the solver, and the capital doing it is posted before your loan opens.

## The bond

When a solver quotes you, it posts capital against your specific loan. That capital is its **bond**, and it stays with your position for the life of the loan.

The bond covers the gap between the fixed rate you were quoted and what the venue actually charges to carry your debt. When the venue's floating rate runs above your fixed rate, the difference comes out of the solver's bond. It does not come out of your loan, and it does not change the rate you agreed to.

The protocol sets a minimum bond for every loan, scaled to the debt asset and the length of the term. Solvers post above that minimum. A bond sized exactly to the floor leaves no room to be wrong, and being wrong is expensive.

## Why the solver wants this to hold

A solver keeps the difference when the venue costs less than the fixed rate it quoted you. It loses its bond when the gap runs far enough the other way.

That puts you and the solver on the same side of the same question. A solver that underprices your quote is the one that pays for it. Nobody is liquidated by accident, and nobody is trying to be.

It is also why quotes are priced loan by loan rather than read off a curve. The solver is committing its own capital to the number it hands you, so it prices your loan rather than an average of loans like yours. See [Why IRIS](/home/introduction/thesis).

## If the backing does fail

It takes a sustained gap between the fixed rate and the venue's cost, not one bad afternoon. But the rules still have to be clear.

If accumulated floating costs eat far enough into the bond, anyone can liquidate it. Your loan then falls back to the underlying venue: the fixed rate stops applying, and from that point you carry the venue's floating rate directly.

Your collateral is not touched by any of this. A solver liquidation is a failure on the solver's side, not on yours. It is a different event from a [venue liquidation](/home/user-guide/liquidations), which is driven by your collateral value and does take collateral.

|                       | Venue liquidation                | Solver liquidation                                   |
| --------------------- | -------------------------------- | ---------------------------------------------------- |
| Caused by             | your collateral falling in value | the solver's bond being drawn down                   |
| What is taken         | part of your collateral          | the solver's bond                                    |
| Your fixed rate       | continues, on a smaller loan     | ends, and the loan carries the venue's floating rate |
| Can you see it coming | yes, watch your health factor    | no, and you are not asked to                         |

### How you find out

The app marks the position as **Solver liquidated**.

This is not something you can watch coming, and you are not expected to. It depends on the solver's bond against its accumulated costs, which sits on the solver's side of the ledger rather than yours. The bond is sized with room precisely so that this stays out of your way.

### What to do

* The loan is now a floating-rate borrow on the venue. Treat it as one.
* Decide whether to repay and close it, or keep carrying it at the floating rate.
* Keep watching your health factor. Collateral risk is unchanged and still yours.