Under Collateralized Initial Liquid Loans provide a way to add initial liquidity to an automated market making trading pair using borrowed capital.

The terms and conditions for borrowing and returning this capital allow both the lender and borrower to manage their cost of capital and repayment schedules.

Initial Liquid Loans terms are defined by standalone smart contracts that outline the loan origination fee, retention premium fee schedule, principal repayment conditions, maximum loan duration, and liquidation conditions.

Currently, loan durations are limited to 10-90 days.

The borrower receives Liquidity Tokens and has full control over them, but they cannot be redeemed for liquidity while a loan is active.

In the case of default through a violation of the terms specified in the ILL, the loan becomes eligible for liquidation.