Liquidity Cool-Down

Liquidity cool-down is a feature where the liquidity that has recently been repaid can be set for cool down (in other words, when the borrower has closed their position). This feature is implemented in the case where suppliers may want to exit after a period of time supplying in the protocol.

The cool-down can be turned on or off depending on the suppliers. If it is off, then the protocol will continue to look for new borrowers to replace the old ones when they have closed their position(s) and repaid the debt. This means there is a chance that your funds will be out on loan again immediately. If the system cannot find a new borrower to match, then your funds will automatically be transferred back to the underlying pool, where you can exit if you desire.

However, if the cool-down is turned on, after the borrower has closed their position and repaid the debt, your funds will automatically be transferred to the underlying pool to earn the pool's APY and will not be available to match P2P for a period of time that you have set.

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