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CONFIDENTIAL & PROPRIETARY © 2026 Inkwell Finance, Inc. All Rights Reserved. This document is for informational purposes only and does not constitute legal, tax, or investment advice, nor an offer to sell or a solicitation to buy any security or other financial instrument. Any examples, structures, or flows described here are design intent only and may change.

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Overview

Every Leviathan loan follows a defined lifecycle managed by the leviathan-core Solana program. Each stage has explicit entry and exit conditions enforced on-chain — loans cannot skip stages or transition without meeting the required criteria.

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Lifecycle Stages

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1. Application

The borrower submits a loan application specifying:
  • Requested capital amount and term
  • Intended use of funds (which protocols, chains, and strategies)
  • Revenue sources that will service the debt
The application is recorded on-chain as a loan account in PENDING state.

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2. Underwriting

The protocol’s credit scoring system (leviathan-score) evaluates the borrower:
  • On-chain credit score is queried or computed
  • Risk tier determines eligible terms, rates, and limits
  • Off-chain ML models may contribute additional analysis via oracle feeds
Underwriting is not a manual approval — it is a programmatic assessment based on the borrower’s on-chain history and credit profile.

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3. Approval

If the borrower meets the credit criteria, the loan transitions to APPROVED state:
  • Loan terms are finalized (principal, rate, term, repayment cap)
  • Policy parameters are set (whitelisted destinations, daily limits, allowed functions)
  • InkPact agreement hash is recorded on-chain (see below)

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4. Funding

Capital is drawn from the lending pool (leviathan-pool) and deployed:
  • Pool reserves are checked for available liquidity
  • Funds are transferred to a policy-gated dWallet on Sui
  • The borrower’s policy sandbox is activated with the approved destination set

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5. Active

The borrower operates within their policy sandbox:
  • Session keys enable trading and operations without per-transaction lender approval
  • Keepers monitor positions and enforce health checks
  • All borrower transactions are verified against policy by leviathan-verifier
Revenue begins flowing through RevenueSplitter contracts on EVM chains, with splits automatically directing a portion to loan repayment.

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6. Repayment

As revenue accumulates:
  • Revenue oracles report repayment progress back to Solana
  • The loan’s outstanding balance decreases
  • Borrowers may also make voluntary additional repayments

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7. Completion

When the repayment cap is reached or the term expires with full repayment:
  • The loan transitions to COMPLETED state
  • Policy restrictions on the dWallet are released
  • Remaining capital returns to the borrower’s full control
  • Pool depositors’ share of returned capital (principal + interest) is reflected in LP token value

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Default Path

If a borrower fails to meet repayment obligations:
  • Health checks detect the shortfall
  • The loan transitions to DEFAULTED state
  • The protocol can initiate enforcement actions through the dWallet
  • Non-performing loans may proceed to NPL auction

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Policy Enforcement

Throughout the active phase, the borrower’s capital operates within a policy sandbox:
  • Whitelisted destinations — only pre-approved contracts and addresses can receive transactions. Attempts to interact with non-whitelisted targets are rejected before signing.
  • Daily limits — time-bounded caps on transaction volume prevent rapid capital extraction, even to approved destinations.
  • Function-level controls — policies restrict not just which contracts are callable, but which specific functions. A borrower approved for trading may be blocked from withdrawal functions on the same protocol.
Policy parameters are immutable for the duration of the loan unless modified through governed on-chain mechanisms.

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Keeper Automation

Keepers are automated agents that perform time-sensitive protocol operations: Keepers operate through delegated execution — they have permission to call specific protocol instructions but cannot access borrower funds directly.

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InkPact Agreements

InkPact provides on-chain agreement verification:
  • A cryptographic hash of the loan agreement document is stored on-chain at approval
  • Both parties can independently verify that the on-chain terms match the signed agreement
  • The hash is immutable once recorded — neither party can claim different terms after the fact
InkPact does not store the agreement itself on-chain — only a verifiable fingerprint. The full document is maintained off-chain by the parties.

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NPL Auctions

When a loan enters default and cannot be recovered through standard enforcement:
  • The non-performing loan position is listed for auction
  • Qualified participants can bid on the distressed position
  • The winning bidder assumes the loan’s rights and enforcement capabilities
  • Proceeds from the auction are distributed to affected pool depositors
NPL auctions provide a market-based resolution mechanism, allowing the protocol to clear defaulted positions without indefinite deadlock.