PawnDocumentation
Pawn documentation
Everything about how Pawn works: borrowing, pricing, limits, the lending pool, security and the program itself. Every rule described here is enforced on-chain by the Pawn program.
Overview
Pawn is a lending protocol on BSC for $PAWN. Holders lock their coins as collateral and receive BNB in the same transaction. Loans last up to 30 days, cost 0.1% per day, and can be repaid at any time. There are no price liquidations: a falling market can never close a loan early.
The BNB that Pawn lends comes from its lending pool. The pool has no outside depositors. It is funded by half of every $PAWN creator fee, routed through BSC's fee sharing, and by the interest paid on repaid loans. That is what makes Pawn self-funded: the coin's own trading activity is the capital behind its loans.
Pawn is a single program. It has no administrator, no pause switch and no withdrawal function. BNB can leave the pool in exactly one way: as a loan to someone who has locked collateral for it.
Lock $PAWN, get BNB now, repay within 30 days to get your coins back; if you don't, your locked coins are burned.
Quick start
- Connect a wallet. Open the app and connect MetaMask or Binance Wallet, Solflare or Backpack. You need $PAWN in that wallet and a little BNB for network fees.
- Enter how much to lock. Type the amount of $PAWN you want to use as collateral. The app shows how much BNB you can borrow against it right now, and why that is the limit.
- Borrow. Choose the loan amount (up to the maximum) and approve the transaction. Your coins move into escrow and the BNB lands in your wallet in the same transaction.
- Repay before day 30. Open Your loans and press Repay. You pay the loan plus interest; your coins return in the same transaction.
Lending opens once $PAWN has graduated to PumpSwap and the market has finished its one-hour warm-up. Until then the app shows the market's status.
Key concepts
- Collateral
- The $PAWN you lock to open a loan. It sits in an escrow account owned by the program, not by any person.
- Loan
- An on-chain account recording who borrowed, how much BNB, against how many coins, and when it expires.
- Lending pool
- The account that holds the BNB available to borrow. It is filled by creator fees and interest.
- Term
- Every loan lasts at most 30 days from the moment it is opened. Repay any time before that.
- Default
- A loan not repaid within 30 days. Its collateral is burned and the borrower keeps the BNB.
- Loan price
- The deliberately conservative price at which collateral is valued when a loan is opened.
Loan lifecycle
A loan moves through three possible states. Each transition is a single on-chain instruction.
Opening a loan
When you borrow, the program first takes a fresh price reading, values your collateral, and checks the amount you asked for against every limit. If any check fails the transaction is rejected and nothing moves. If they all pass, your coins are transferred into escrow, the program verifies the escrow received the full amount, and the BNB is sent from the pool to your wallet. All of this happens atomically in one transaction.
Repaying
Repaying sends the principal plus interest to the pool and returns your exact collateral from escrow. The loan account is closed and its small rent deposit is refunded to you. Only the borrower can repay their own loan, and only before the deadline. Repayment does not depend on any price, so market conditions can never block it.
Defaulting
Once 30 days have passed, anyone can close the loan. The locked collateral is burned, permanently reducing $PAWN supply, and the loan account's rent deposit is returned to the borrower. The borrower keeps the BNB they received.
Pricing and valuation
A lending protocol is only as safe as the price it lends against. Pawn values collateral conservatively, using data read directly from $PAWN's canonical PumpSwap pool, and makes manipulation unprofitable.
The loan price
Every loan uses the lowest of three prices:
- Spot price. The PumpSwap pool price at the moment of the loan.
- Slow average. An on-chain moving average that closes about 3.3% of the gap to spot per minute. A single update can never move it by more than one minute's worth, however long since the last update.
- Recent readings. The lowest of the last eight price readings, each taken at least 30 seconds apart.
Because the stored readings were written in earlier transactions, pumping the price inside your own borrow transaction cannot raise the loan price. Raising it would require holding an inflated price across minutes of readings while the average slowly catches up, which costs far more than the loan limits allow anyone to extract.
Collateral value
Your collateral is then valued at the lower of:
- the amount of $PAWN multiplied by the loan price, and
- what that amount would actually sell for in one trade on PumpSwap, minus a 3% safety margin.
The second check means a very large position can never borrow against a price it could not realise: price impact is priced in.
PumpSwap virtual reserves
Since 30 September 2026, PumpSwap pools can carry signed virtual BNB reserves. Pawn prices against effective reserves (real vault balance plus virtual reserves), exactly as PumpSwap does, and caps any sale value at the BNB actually held in the pool's vault.
Worked example
| Collateral | 2,000,000 $PAWN |
| Loan price (lowest of the three) | 2.36 BNB per 1M |
| Value at loan price | 4.72 BNB |
| One-trade sale value, minus 3% | 4.60 BNB |
| Collateral value (lower of the two) | 4.60 BNB |
| Maximum loan at 40% | 1.84 BNB |
Illustrative figures. The app always shows your live numbers before you sign.
Borrowing limits
The amount you can borrow is the smallest of the following limits, all enforced by the program on every loan.
| Limit | Value | Purpose |
|---|---|---|
| Loan to value | 40% of collateral value | Leaves a wide buffer between loan and collateral. |
| Largest single loan | 5% of the pool* | No single borrower can take a large share of the pool. |
| Hourly lending | 10% of the pool* per hour | Caps how fast the pool can be lent out. |
| Utilization | 80% of the pool | Lending stops once 80% of the pool is lent. |
| Available BNB | Idle pool balance | The pool's rent reserve is never lent. |
| Minimum loan | 0.01 BNB | Keeps loans meaningful. |
* “The pool” here means the smaller of the lending pool (available plus lent out) and the real BNB in $PAWN's PumpSwap pool. If the lending pool ever grows larger than the trading market, lending speed follows the market's depth instead.
The hourly limit
The hourly limit is a leaky bucket rather than a fixed window. Each loan fills the bucket, and the bucket drains continuously at the full hourly limit per hour. Borrowers can use the full allowance in a burst, but the sustained rate can never exceed it, and there is no window boundary to exploit.
Many wallets
Every limit is measured against the pool, not against a borrower. Splitting a position across wallets does not unlock more.
Interest
Interest is 0.1% of the principal per day started, with a minimum of one day and a maximum of the 30-day term. It is paid when you repay, and it goes entirely to the lending pool.
| Repaid after | Interest | On a 1 BNB loan |
|---|---|---|
| Within 1 day | 0.1% | 0.001 BNB |
| 7 days | 0.7% | 0.007 BNB |
| 14 days | 1.4% | 0.014 BNB |
| 30 days | 3.0% | 0.030 BNB |
“Day started” means 1 day and 1 minute counts as 2 days. Amounts are rounded up to the nearest lamport.
Deadlines and default
Each loan's deadline is fixed when it opens: exactly 30 days later, shown in the app to the minute. Repayment is accepted up to that moment and rejected after it. There are no extensions and no grace period, so the deadline is the same for everyone and cannot be gamed.
After the deadline, the loan can be closed by anyone. Pawn's upkeep service does it within about a minute. Closing a defaulted loan burns its collateral; the burned coins are removed from $PAWN's total supply for good.
Selling defaulted collateral would push the price down for every holder. Burning it removes the coins from circulation instead. In effect, a default means the pool bought those coins at no more than 40% of their value and retired them.
The lending pool
The lending pool is a program-derived account: an address with no private key, controlled only by the Pawn program. It holds plain BNB.
How it is funded
- Creator fees. BSC charges a creator fee on every $PAWN trade. Through BSC's fee sharing, 50% of those fees are routed to the pool. The split is set in BSC's own fee-sharing configuration and locked there.
- Interest. Every repaid loan returns its principal plus interest to the pool.
- Contributions. Anyone can send BNB to the pool address. It becomes lending capital permanently.
How BNB leaves
Only as a loan. The program contains no instruction that can withdraw, transfer or redirect pool BNB for any other purpose. BNB sent to the pool cannot be taken back by anyone, including the team.
The pool address is derived from the coin's contract address and will be shown here at launch.
Market lifecycle
- Bonding curve. After launch, $PAWN trades on BSC's bonding curve. Creator fees already accrue to the pool, but lending is not yet open.
- Graduation. When the bonding curve completes, $PAWN migrates to its canonical PumpSwap pool. This is the price source Pawn uses.
- Market opens. The Pawn market is opened against that pool. The program verifies it is the genuine canonical pool created by BSC, so a look-alike pool can never be used as a price source.
- Warm-up. Lending stays closed for one hour and until eight fresh price readings have been recorded, so nothing observed at the moment of opening can influence a loan.
- Live. Borrowing is open, subject to the limits above.
Upkeep and automation
A few routine actions keep the protocol current. Every one of them is permissionless: anyone can perform them, and none of them can move funds anywhere other than where the program dictates. Pawn runs an upkeep service that performs them automatically.
| Action | Frequency | What it does |
|---|---|---|
| Fee sweep | Every few minutes | Moves the pool's accrued share of creator fees from BSC into the pool as BNB. |
| Price reading | Every 30 seconds | Records the PumpSwap price into the slow average and the recent readings. |
| Default closing | Every minute | Closes loans past their deadline and burns their collateral. |
| WBNB sync | As needed | Converts any wrapped BNB owned by the pool back into plain BNB in the pool. |
If the upkeep service ever stopped, borrowers could still repay, and anyone could perform these actions themselves.
Security model
What the program guarantees
- No administrator. There is no admin role, owner switch, pause or allow-list. The same rules apply to every wallet.
- No withdrawal path. BNB leaves the pool only as a loan backed by locked collateral.
- Repayment can't be blocked. Repaying reads no price and needs no one's permission. Pay before the deadline and your exact collateral returns.
- Collateral is isolated. Collateral sits in an escrow owned by the program. Only repay (to the borrower) and default (burn) can move it.
- Genuine price source only. The market can only open against $PAWN's canonical PumpSwap pool, and every later price read is pinned to that exact pool and its vaults.
- Safe collateral only. The program refuses collateral mints with a freeze authority or any token extension that could move or lock escrowed coins.
Testing and review
The program is covered by unit tests for every formula and end-to-end tests of complete loan cycles, including tests against a real graduated BSC pool copied from mainnet. It went through multiple independent adversarial reviews before deployment; every issue found was fixed and given a regression test.
Upgrade key
Upgrade key status: not deployed. Once the key is burned, nobody can change the program's code or rules, ever. This status is read live from the chain.
Risks
Pawn removes liquidation risk, but borrowing against a volatile asset still carries risk. Understand these before borrowing.
- Missing the deadline. If you do not repay within 30 days, your collateral is burned. There is no extension.
- Price movement. If $PAWN rises, repaying recovers coins now worth more. If it falls, you still owe the same BNB to get them back.
- Smart contract risk. The program has been tested and reviewed, but no software is guaranteed free of bugs.
- Dependency on BSC. Pricing reads BSC's PumpSwap pool. A future change to its format could pause new loans; existing loans can always be repaid.
- Pool capacity. Borrowing is limited by the pool's size and the limits above, so large loans may not be available at all times.
Program reference
Addresses
Instructions
| Instruction | Who | Effect |
|---|---|---|
open_market | Anyone, once | Opens the market against the coin's canonical PumpSwap pool and creates the escrow. |
poke | Anyone | Records a price reading (at most one per 30 seconds). |
borrow | Borrower | Locks collateral and sends BNB from the pool, within all limits. |
repay | Borrower | Pays principal plus interest and returns the collateral. Before the deadline only. |
forfeit | Anyone | After the deadline, burns the collateral and closes the loan. |
sync_wsol | Anyone | Unwraps pool-owned wrapped BNB into the pool. |
Accounts
| Account | Address seeds | Holds |
|---|---|---|
| Market | ["market", mint] | Price state, limits state and lifetime totals. |
| Pool | ["pool", mint] | The lending BNB. |
| Escrow | Market's token account | All locked collateral. |
| Loan | ["loan", market, borrower, nonce] | One open loan. |
Parameters
| Loan to value | 40% |
| Term | 30 days |
| Interest | 0.1% per day started |
| Largest single loan | 5% of pool depth |
| Hourly lending | 10% of pool depth |
| Maximum utilization | 80% |
| Minimum loan | 0.01 BNB |
| Sale value margin | 3% |
| Average window | 30 minutes (max 60 s credit per reading) |
| Reading interval | 30 seconds minimum |
| Recent readings kept | 8 |
| Warm-up | 1 hour and 8 readings after market open |
Parameters are constants compiled into the program; there is no setting that can change them.
FAQ
- Can a price crash liquidate my loan?
- No. Pawn has no price liquidations. The only way to lose your collateral is to miss the 30-day deadline.
- Can I repay early?
- Yes, at any time. You only pay interest for the days started.
- Can I repay part of a loan?
- No. Each loan is repaid in full. To borrow less, open a smaller loan; you can hold several loans at once.
- Can I extend a loan?
- Not directly. Repay it and open a new loan at the current price and limits.
- Why can I borrow less than 40% of the market value?
- Because the loan price is the lowest of three prices, your collateral is valued at its one-trade sale value, and pool limits may apply. The app shows which limit applies.
- Who receives my interest?
- The lending pool. It becomes capital for future loans.
- Can the team take the pool's BNB?
- No. There is no withdrawal function in the program.
- What happens to burned collateral?
- It is destroyed through the token program and removed from total supply.
- Why is borrowing closed right now?
- Lending opens after $PAWN graduates to PumpSwap and the market completes its warm-up. The app shows the current phase.
Glossary
- PDA
- Program-derived address. An account with no private key that only a specific program can sign for.
- PumpSwap
- BSC's automated market maker, where coins trade after graduating from the bonding curve.
- Graduation
- The moment a BSC coin completes its bonding curve and migrates to PumpSwap.
- Creator fee
- The fee BSC charges on every trade and pays to the coin's creator or fee-sharing recipients.
- Utilization
- The share of the lending pool currently lent out.
- Lamport
- The smallest unit of BNB: one billionth of a BNB.