# CastleDAO Lending

<figure><img src="https://637209769-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F1W1GvppCOxKu8bPF5dQl%2Fuploads%2F0EaR9AxP0ndceK3fGReP%2Fimage.png?alt=media&#x26;token=2021766d-eed8-450c-aa28-1b1debbf0cbd" alt=""><figcaption><p>Borrowing MAGIc against a Smol</p></figcaption></figure>

CastleDAO will be offering $MAGIC borrowing against different sets of collections, but starting with Smol Brains, due to their high liquidity and demand.&#x20;

Users will be able to stake their Smol Brains, and borrow different amounts of $MAGIC against them. At the same time, borrowers will earn rewards in RUBY (CastleDAO native token) that can be used for in-game purchases or starting battles.

The interest rates charged on the borrowing will be simple 10%/20% per year, not compounded. The final interest rates will be decided on launch.&#x20;

Borrowing $MAGIC will allow SmolBrain holders to leverage their exposure to $MAGIC and be able to participate in other activities without having to dispose of their Smol.\
\
In version 2 of the lending protocol CastleDAO will allow users to also lend $MAGIC to the market.&#x20;