What Is Buyback Protection?

A borrower defaults, yet your principal lands back in your wallet. See how the Buyback badge changes the game on 8lends.

Buyback is a mechanism that protects the loan principal through a third party (not the platform, not Maclear AG). If the borrower defaults (60 days late), the partner buys out your position and returns the full principal straight away – you don't have to wait for the collateral to be sold. The buyback happens under the terms of the Buyback program. Projects with Buyback carry a clear badge on their card. The interest rate on Buyback projects is usually lower – that's the trade-off for the extra protection. Buyback doesn't apply to every project, only those marked with the badge.

How Buyback works

Buyback is an agreement between 8lends and a third party (the partner) that covers specific projects:

You invest in a project that has the Buyback badge.
If the borrower defaults (60 days past due), the buyback partner buys out your position.
You get the full loan principal back in your wallet, without waiting for Maclear AG to sell the collateral. This works under the Buyback program's terms.
The collateral and its recovery then become the partner's problem – that's their collection process, and you're no longer involved.

The buyback timeframe is set out in the program terms for the specific project.

What Buyback doesn't cover

Interest that had already accrued before the default – this gets paid out based on what the borrower actually paid before payments stopped.
Future interest payments – once your position is bought out, it no longer exists, so no further interest accrues.
8LNDS token yield from Proof of Loan – the vesting schedule continues, and the tokens stay with you.

In short: Buyback covers the principal, not lost yield.

Who provides Buyback

Buyback is provided by a third party – an external partner, not the 8lends platform and not Maclear AG. This means:

The partner has its own financial obligations and its own reserve buffer.
The partner's obligations don't depend on whether the 8lends platform is up and running.
If the partner itself defaults, the general terms of its commercial liability apply.

Buyback vs a standard RWA project

Every project on 8lends is backed by real collateral (RWA). The difference with Buyback projects comes down to speed and certainty of repayment:

Aspect	Standard RWA project	Project with Buyback
Collateral	Yes (RWA)	Yes (RWA)
In case of default	Maclear AG sells the collateral and distributes the proceeds proportionally	The partner buys out the position and returns the full principal under program terms
Repayment timeline after default	1–12 months (collateral sale)	1–2 months (per Buyback program terms)
Amount returned	Depends on what the collateral sale brings in	Full loan principal (under program terms)
APR	Higher	Usually lower

How to tell if a project has Buyback

Certain projects on the platform carry a Buyback badge, which means they're part of the Buyback program. No badge? Then Buyback doesn't apply, and the standard collateral sale process kicks in if there's a default.

Frequently Asked Questions

Is Buyback a guarantee?

No. Buyback is an agreement with a third party that applies under the program's terms. A guarantee would be an unconditional obligation; Buyback depends on a default actually happening, the conditions being met correctly, and the buyback partner being in place. It's a protection mechanism, not a guarantee in the legal sense.

Why would I choose a standard project if Buyback offers better protection?

Buyback projects usually come with a lower rate than standard RWA projects – that's the price you pay for the extra protection. You pick the risk/reward balance that suits you and can mix both types of projects in your portfolio.

What if the buyback partner fails to deliver?

Then the standard procedure takes over: Maclear AG, as Collateral Agent, sells the project's collateral and distributes the proceeds among investors proportionally. So Buyback doesn't replace the collateral backing – it's an extra layer of protection, not a substitute.

Does Buyback work in every country?

Buyback isn't tied to your jurisdiction – it applies to all investors in a project that carries the badge. Residency restrictions (sanctioned countries) only come into play at the KYC stage.

Can I buy Buyback separately from an investment?

No. Buyback isn't a standalone product you can purchase. It's part of the terms of a particular project – either the project includes Buyback or it doesn't.

After a buyback, does my position disappear?

Yes. Once the buyback partner returns 100% of the principal, your position in that project is closed. You won't receive any more interest payments from it.