> For the complete documentation index, see [llms.txt](https://castledao.gitbook.io/castles/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://castledao.gitbook.io/castles/castle-protocol-v1/castledao-lending.md).

# CastleDAO Lending

<figure><img src="/files/uMS0FyzRs227NWDslrrF" 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;


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