A locate is permission to sell shares you do not own — a lender's inventory, set aside for you, at a price. It is not a trade, and this desk does not route one. You borrow the shares here and you sell them wherever they fill best, on any venue on this chain, at any time, or never.

Everything the desk holds and everything it owes is denominated in the token's raw units — the number a plain ERC-20 balanceOf returns. That single choice is what makes §5 work, and it is the reason this protocol makes sense on this chain in particular.

The rate is a function of one thing: how much of a name is still on the shelf. Two straight lines meeting at 85% utilisation, from 0.25% on an untouched shelf to 150% on a bare one.

Interest accrues per second on the borrowed raw units and is paid in the shares themselves — a borrower owes gradually more shares, a lender is owed gradually more. Every basis point goes to the lenders of that name, diluted only by the shares still sitting idle. There is no reserve factor, because there is no reserve and nobody to pay it to.

A lender can only be handed shares that are not currently on loan. There is no phone call here and nobody to answer it, so the recall is the rate: past the kink the bill climbs to 150% a year and borrowers close. That is the whole mechanism, and it is the honest version of what a recall is on a real desk anyway.

One account, many locates, cross-margined in USDG the way a prime brokerage account is, up to 8 names at once. Every margin check walks that list, so it has to have an end.

Open at 150% of the market value of what you borrowed. Reg T's own number, and it means what it means on a real short: of that 150, a hundred is money you already have — the proceeds of the sale, which you bring back and post. The desk does not hold your proceeds because it did not sell anything for you.

Below 130% the account is open to a buy-in. Taking collateral out is checked against the 150 line, not the 130 one, so you can never walk your own account down into the danger band on purpose.

Below maintenance, anyone may deliver your shares for you and take your collateral for it, plus 8%. That is the real remedy on a real desk and it is the real name for it.

One buy-in may close at most 50% of a single name, so a borrower one tick under the line is not wiped for being one tick under the line. The 8% sits comfortably inside the thirty points between maintenance and the money, so a buy-in pays for itself long before the lenders are anywhere near at risk.

Worked: short 10 shares at $320 against $4,800 posted — exactly 150%. The name runs to $372 and the account is at 129.0%, which is open season. A buyer-in delivers 5 shares worth $1,860 and is paid $2,008.80. The borrower is left short 5 against $2,791.20 — 150.1% — and the account is back above the line it opened at.

Robinhood's tokenized stocks never distribute a dividend. They raise a uiMultiplier, and it moves balanceOfUI only — the raw ERC-20 balance never changes. Every venue on this chain reads the raw balance, and is therefore blind to every dividend that has ever been paid on the asset it is holding.

On a real stock loan desk, this is the worst job on the floor. The lender gave up their shares, the issuer pays whoever holds them now, and the borrower owes a manufactured dividend out of pocket. There is a back office for it. There is case law about it.

Here it is an accounting identity, because every number in the desk is a raw unit. You borrowed a hundred raw units, you return a hundred raw units, and after the multiplier those same units are worth a hundred and one shares. The lender was paid without anyone sending anything. The short bought back into a price that rose by exactly the dividend. Nothing was reconciled, because nothing needed to be.

A multiplier can also fall — that is a reverse split, and every claim falls with it, which is correct, because the shares really did consolidate. Updates are scheduled with a public effectiveAt in the future, so the board carries the countdown and every short can see the bill coming to the second.

A ten-minute time-weighted average out of a Uniswap V3 pool against USDG, never the spot. Spot is one swap away from anything; an average costs an attacker the whole window, in a pool they do not own both sides of, and a buy-in still requires them to deliver real shares.

V3 rather than V4, because V4 is a singleton that keeps no observations and no oracle hook is deployed on this chain — V4 here has no price history at all. The V3 factory that matters is 0x1f7d7550…; the canonical Uniswap address on this chain holds an unrelated contract, and anything wired to it reads a pool that is not the pool without ever erroring.

A pool that has never had its observation cardinality raised remembers exactly one price, which is spot wearing a hat. Listing a name pays to lengthen that ring, and the desk refuses to open the market until the pool actually remembers two minutes of trading.

If an account's collateral reaches zero and it still owes shares, nobody will buy it in — there is nothing left to be paid with. That debt is cancelled and the loss is taken by the lenders of that one name, immediately and visibly, by marking their index down.

The alternative is how lending protocols usually die: leave the debt on the books, let the last lenders out discover there is nothing there, and call the difference a bank run. A loss you can read on the board is a smaller loss than a loss you find at the door.