# FAQ

## What is Mystic?

Mystic is a lending market for tokenized real-world assets, which focuses on leveraging the best of RWAs to maximize their use in DeFi. The protocol is composed of curated lending vaults, 1-click looping and the ecosystem's key LST, myPLUME.

## Why Mystic?

The mechanisms of TradFi are inefficient and slow, both putting people at risk due to excessive counterparty risk and locking many out of the system due to often misplaced operational and regulatory concerns. In comparison, crypto lending is much cheaper, faster, more secure and transparent for consumers.

It stood out to us that, if we are to bring DeFi lending to the world, we need to have a lending market structured so that off-chain assets can be seamlessly supported, and where borrowers, lenders and underwriters can seamlessly connect with one another. That is what we are building at Mystic.

## How is it different than other lending markets?

Current lending markets lack the modularity and support for RWAs to be able to deliver on the above vision. Mystic steps in as an ecosystem where that is not only possible, but which has been purpose-built for this mission.

## How do I interact with Mystic?

You can lend and borrow directly via our interface [here](https://app.mysticfinance.xyz/) or access our website at [https://mysticfinance.xyz.](https://mysticfinance.xyz) To see how to borrow and supply on Mystic, please see our [User Guide](/user-guide/supply.md).

## How has the protocol been audited for security?

Mystic has been built on top of Morpho, which has been extensively audited and battle-tested. Its audits may be found [here](https://docs.morpho.org/getting-started/resources/audits/). Mystic’s additional changes of protocol permissioning, custodian integrations and our LST have been thoroughly audited by the best in the business also. See our audits [here](https://hacken.io/audits/mystic-finance/).

## What are the fees?

* A 5-20% interest rate fee on lending markets split by Mystic and our curators.
* 10% reward fee on our LST.

## What is the health factor?

The health factor is the representation of how much collateral is backing your debt positions, which in turn expresses how close it is to liquidation. It is calculated as:

$$
\frac{Total Collateral Value \* LiquidationLTV}{TotalBorrowValue}
$$

Liquidation LTV (LLTV) is the point at which a position becomes eligible for liquidation. It is usually slightly higher than the market’s LTV, to give borrowers some room to avoid liquidations. As for how to interpret the HF:

* If HF < 1, then the position is eligible for liquidation.
* If HF >1, then the position is considered healthy.

## **How do liquidations work on Mystic?**

A position is eligible for liquidation when its health factor is equal to or below 1, meaning it has reached the market’s LLTV. When this happens, liquidators repay up to 100% of the position’s debt for a premium by using one the 3 liquidation processes described in [liquidations](/core-concepts/liquidations.md).

## Are flash loans available?

Flash loans were first pioneered by Aave, and they let users borrow any amount without collateral, so long as they repay their loan in the same transaction. This is typically used when doing liquidations, leveraging a position or doing arbitrage.

You can do a flash loan by calling the flashLoan function in our smart contracts. Please note the caller contract must have a callback function called executeOperation which returns the amount loaned.

## How do vaults work?

Vaults send their liquidity to sets of pools that all contain the same one borrow asset (e.g. USDC). This way, vaults enable creating custom lending value propositions that are more attractive to lenders.


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.mysticfinance.xyz/overview/faq.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.