Fathom Lending Review: Is XDC Lending Worth the Risk?

Fathom Lending is a non-custodial borrowing and lending protocol on XDC Network. You can supply XDC or USDC to earn variable interest, or use supplied assets as collateral to borrow. Fathom identifies XDC and USDC as its prime markets; check the app for the active markets and their current terms before you act.

Rates move with demand: Fathom says both supply and borrow rates rise as more of a market is borrowed. Suppliers earn interest paid by borrowers, less a 10% share kept by the protocol. The displayed rates are variable, not a guaranteed return. Borrowers can take out assets up to the market’s loan-to-value limit, and must keep their health factor above 1 to avoid liquidation. Fathom says native XDC is wrapped and unwrapped for you in the same transaction.

Your main ongoing cost as a borrower is variable interest, which changes with market demand. Suppliers do not receive all of that interest: Fathom keeps 10% of the interest paid by borrowers before the rest accrues to suppliers. The app shows live rates, so check the current supply and borrow APY for the market you plan to use rather than relying on a fixed estimate.

You will also need to account for XDC Network transaction costs when supplying, borrowing, repaying or withdrawing. Fathom does not publish a separate fee schedule in its lending information, so check the transaction preview and terms in the app before signing. Your ability to withdraw is subject to available market liquidity. Borrowers should also leave room for rate changes and collateral-price movements; a loan that looks manageable at one moment can become vulnerable as conditions change.

Fathom describes its lending service as non-custodial: you connect a wallet and sign each transaction, rather than handing your keys to Fathom. That does not remove smart-contract, oracle, market-liquidity or collateral risks. Fathom says each market has a price feed, and those prices determine collateral values, borrowing limits and liquidation decisions.

Halborn verified that Fathom’s deployed contracts match an audited lending codebase. Fathom explicitly describes this engagement as a verification review, not a full-scope audit. The engagement was dated March 10–12, 2026, and the report was updated March 25, 2026. It lists no critical, high, medium or low findings, and six informational findings; Fathom says three were solved and three acknowledged. This is useful assurance, but it is not a guarantee against bugs or losses. Borrow only what you can manage if collateral values fall or the market becomes less liquid.

To use Fathom, connect a wallet configured for XDC Network, choose an active market and review its live rate and terms. The app presents market details such as supply and borrow rates, total supplied, maximum loan-to-value and liquidation threshold. These figures matter: the maximum borrowing amount is not a safe target, and a health factor below 1 can trigger liquidation.

Fathom says you can withdraw supplied assets at any time only when the market has enough liquidity. For a loan, keep monitoring your health factor and repay debt or add collateral when needed. The project also offers a Lending MCP that reads markets and positions, simulates actions and prepares transactions for you to sign; it does not hold keys. The wallet options, mobile-specific support and transaction speed are not detailed in Fathom’s lending information, so confirm compatibility before depositing.

Fathom is limited to XDC Network, with XDC and USDC named as its prime lending markets. It is therefore not a fit if you want a broad choice of assets or access through another chain. Rates are variable, and the exact return or borrowing cost can change as market use shifts. Fathom does not promise returns, and withdrawals can be constrained by available liquidity.

Borrowing also adds liquidation risk: if your health factor drops below 1, part of your position can be liquidated. That can happen when collateral prices move or debt grows relative to collateral. The non-custodial model means you control your wallet, but it does not protect you from contract issues, oracle errors or losses caused by market conditions. If you need fixed rates, guaranteed access to withdrawals, or a full-scope audit, review those limitations carefully before using the protocol.