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Denar is three layers stacked on top of each other. Each layer does one job, and each can be understood on its own.

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Layer 1 — Isolated markets

The foundation is Morpho Blue: a minimal, immutable lending engine. Each Denar market is a sealed five-part tuple — collateral asset, loan asset, oracle, interest model, and liquidation threshold — fixed forever at creation. Nobody, including the Denar team, can change the rules of a market after it exists. Isolation is the point. Tokenized equities each carry their own event risk: trading halts, corporate actions, thin liquidity. In a shared-pool design (the Aave model), one bad asset can poison the entire protocol. In Denar, the blast radius of any single stock is its own market — never its neighbors. The trade-off is that liquidity is per-market too: USDG lent to the NVDA market can only be borrowed by NVDA-collateral borrowers. That’s what the vault layer solves.

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Layer 2 — The USDG vault

Most lenders don’t want to study six markets, split funds across them, and rebalance as conditions change. The Denar USDG Vault (dnUSDG) does it for them: one ERC-4626 deposit, allocated across the stock markets according to a supply queue and per-market caps set by the curator.
  • Deposits fill markets in queue order, each up to its cap, then overflow to the next.
  • Caps bound the vault’s worst-case exposure to any single stock. Raising a cap goes through a 1-day timelock; lowering one is instant.
  • Yield from every market flows back into the vault’s share price.
  • Withdrawals draw on unborrowed liquidity at any time — the vault never takes custody in any meaningful sense.
Advanced lenders can skip the vault entirely and lend directly to a single market.

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Layer 3 — Equity-aware oracles

Every market prices its collateral through a dedicated Denar oracle that wraps Chainlink feeds with the guards equities require:
  • Two feeds, not one. Collateral is priced by its stock feed and converted through an independent USDG/USD feed — Denar never assumes the stablecoin is worth exactly $1.
  • Market-hours awareness. Stock feeds update 24/5. Overnight and on weekends the oracle serves the last traded price; only when a feed exceeds a staleness bound sized for the longest normal market closure does the market pause.
  • Corporate-action pauses. During splits and dividends, the token issuer flags the oracle; Denar honors the flag and pauses the market instead of trading on a half-updated price.
The full logic — including exactly what pauses and what never does — is on the Oracles & market hours page.

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What a borrow looks like end to end

1

A lender seeds liquidity

USDG is deposited into the vault and allocated to the NVDA market, up to its cap.
2

A borrower opens a position

They deposit NVDA tokens as collateral and borrow USDG — up to 62.5% of the collateral’s oracle value, though prudent positions stay well below that.
3

Interest accrues

The adaptive rate model charges the borrower continuously; 10% of that interest goes to the protocol, the rest to lenders.
4

The position closes — one way or another

The borrower repays and reclaims collateral (possible in every protocol state), or — if the position’s health factor falls below 1 — anyone liquidates it, repaying the debt in exchange for collateral at a bonus.
There is no configuration of failures that traps user funds forever: repaying debt and recovering collateral works even with a permanently dead oracle.