Product Features

Isolated Lending Markets

In the world of DeFi, isolated lending markets are crucial due to the inherent risk associated with relying on a single collateral. A black-swan event affecting one collateral can lead to significant risks and bad debt for the entire protocol.

To address this challenge, Arvin introduces isolated lending markets with distinct caps for various types of collateral. These lending markets are controlled by the DAO, ensuring that risks are contained within each specific market. This means that any risks or adverse events in one lending market will remain isolated and not impact other lending markets.

By implementing isolated lending markets, Arvin enhances risk management and safeguards the overall stability of the protocol. It allows for greater resilience and protects users' assets by minimizing the potential contagion effects that can occur in a unified lending market.

Flexible Pricing Mechanism

The presence of risky long-tail assets does not necessarily imply that they lack the potential for significant future growth. It can be frustrating for individuals holding these assets to be unable to enhance their returns through additional DeFi strategies. Evaluating risk in relation to potential returns is a fundamental principle. In line with this, Arvin will gradually incorporate support for more long-tail assets as collateral.

However, it's important to note that as the inclusion of these assets expands, the corresponding interest rates and borrowing fees will be adjusted accordingly. This adjustment benefits the protocol by generating more revenue, while simultaneously providing borrowers with an opportunity to enhance their capital efficiency. This approach fosters a mutually beneficial outcome, creating a win-win situation for all stakeholders involved.

Key support for LSD assets

Following the Ethereum Shapella update, the growth potential of LSD assets is expected to accelerate significantly. However, the current market lacks an adequate number of lending products for these assets, resulting in limited composability. This lack of composability hinders users from effectively improving their capital efficiency.

Recognizing this challenge, Arvin is committed to providing key support for LSD assets. Arvin's focus lies in facilitating a more composable ecosystem for lending these assets, akin to interlocking Lego blocks. By enabling greater composability, Arvin aims to enhance the capital efficiency of users engaging with LSD assets.