# Design Architecture

The design architecture behind FILLiquid is facilitated through an audited smart contract that automatically executes transactions on the blockchain.

The smart contract serves as both a liquidity pool and a lending market, with the capabilities of handling interest rate calculations, liquidity management, and clearing and settlement operations.\
The smart contract primarily interacts with two user groups:

1. Lenders (FIL Holders)
2. Borrowers (SPs)

Lenders are typically FIL holders looking to earn interest on their idle assets by depositing their liquidity into the pool.

Borrowers are typically SPs seeking FIL to meet their collateral requirements for expanding storage power.

The following diagram illustrates an overview of our entire ecosystem:

<figure><img src="/files/15pWqypI51AvvwvODkJm" alt=""><figcaption><p>Figure 1[1]: Relationship between lenders, borrowers and the liquidity pool</p></figcaption></figure>

\[1]Icon image: Flaticon.com


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