Collateralised Lending

Borrowing and lending of crypto assets. Crypto providers are able to earn an interest by depositing crypto to a specific pool. Borrowers are able to take out loans by collateralising crypto. By allowing collateralisation and lending across various cryptos, users are able to mix-and-match their current and borrowed assets according to their liquidity preferences.

Principles

A lending contract defines the asset to hold in reserve as well as the share of each borrower/lender. The interests paid to lenders or paid by borrowers is dynamically determined based on a combination of market mechanisms and protocol governance targets. Utilisation and collateralisation ratios can be used to improve capital efficiency.

Benefits

Additional liquidity generated from utilising dormant assets (i.e. leveraging); No need to sell assets to generate yield; Creation of liquidation markets

Protocols

• Aave
• Compound
• Cream
• Salt