Mars is a credit protocol built for what’s next: non-custodial, open-source, transparent, algorithmic, and governed by the community. Its goal is similar to banking-bringing in deposits, enabling lending, and addressing illiquidity and insolvency risks. The difference is that Mars runs fully automated, on-chain credit infrastructure, with decisions made by a decentralised community through a clear governance workflow. In this system, every choice is handled by the Martian Council. The council is made up of MARS stakers who provide a backstop for specific protocol risks in return for a share of protocol borrowing fees.

Mars supports two separate borrowing approaches:

Borrowing by users from the Red Bank (also referred to as "Contract-to-Borrower" or C2B borrowing)Borrowing by smart contracts in the Fields of Mars (more precisely, "Contract-to-Contract" or C2C borrowing).

Within the Mars protocol, multiple roles participate: Lenders, Collateralized Borrowers, Contract-to-Contract Borrowers (Whitelisted), and the Martian Council.

A user can supply a CW20 asset to Mars and receive dynamic interest. The same user can also take on debt against the collateral they’ve deposited, with the aim of generating additional profit.A smart contract can also obtain loans from the Mars protocol. The system is protected through a liquidation strategy that has been implemented. Only whitelisted projects may access Contract-to-Contract loans. C2C borrowing is handled through approval under (and constrained by) the protocol’s governance procedures.

There are 4 stakeholder groups in the Mars Protocol ecosystem:

Lenders: Place assets into Mars liquidity pools and receive interest based on the rateBorrowers (collateralised): Take assets from Mars liquidity pools by using their deposited assets as collateral. Because of this, they must also be lenders (depositors)Borrowers (contract-based): Smart contracts that borrow from Mars liquidity pools without posting collateral. Each smart contract credit line must be approved via governance and comes with a credit limit to reduce the protocol’s risk exposureCouncil: Stake MARS to receive protocol fees, take part in governance, and backstop certain protocol risks.