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.
See also:
Risk Disclosure: Investing on 8lends involves risk, including the possible loss of principal. The Buyback program only applies to projects marked with the Buyback badge and works under the program's terms – it is not a guarantee of full repayment. Past performance does not guarantee future results. 8lends is a platform operated by CLEARCHAIN CORP, registered with FINTRAC (Canada) as a Money Services Business. Maclear AG (Switzerland), a member of PolyReg SRO supervised by FINMA, acts as the Collateral Agent. Regulatory framework as of September 2026.