February 7, 2023
- Mod and his team are working on a modular lending market or protocol.
- Every lending market consists of three things:
- The Lender - person with assets they want to lend out
- The Borrower - person borrowing said assets
- The Terms - determined formula the protocol uses to calculate the interest rate and then settle any other fees that are involved.
- Markets have limitations based on which assets are accepted, whether borrowing is permissionless, whether loans are under/over collateralized, and what can be done with the loan.
- Modulend aims to solve these problems using a modular architecture that will be divided into three things.
- The first module will be the Savers, the lenders who have want to loan assets
- The second module would be the terms
- Lastly would be the Terminal, basically what you can do with that loan
- They believe that with these three modules, you can build any sort of lending market you can imagine.
- To begin with, they intend to seed a lending pool for Root. In the future, the tech could be used by Beanstalk itself if Beanstalk wants to issue loans directly.
- Wells will introduce provable liquidity, which will allow lenders to be assured that they can liquidate assets within a price range. It could also allow for greater collateral efficiency by demonstrating the exact value that can be realized from a given collateral through a liquidation, potentially lowering collateral requirements.
- Modulend will facilitate the lending and borrowing of any asset under any terms that can be composed together and then used according to the rules of the loan. This is being built in a maximally composable manner, such that all pieces can be developed independently and then assembled in a modular fashion.
- Initially, the focus will be on under-collateralized lending, though in the future over-collateralized loans will be supported as well.
- Undercollateralized loans are made possible by the use of the funds being defined by the terms of the loan and both the collateral and borrowed funds remaining custodied by the loan contract.
- New Root token is currently under audit with Halborn.
- Improved Scalability, such that minting scales without the prohibitive slippage that had been observed with the current version.
- Ability to accept multiple deposit types
- Storing deposits as a linked list from newest season to oldest
- Each whitelisted token will have a maximum exposure percent for each deposit type, to be defined by the Root DAO
- The Root contract will be minting based off BDV instead of BDV, Stalk and Seeds, such that as the Root token agers and there is more Stalk in the contract it will not be prohibitive to new minters.
- Redemptions will be prioritized to redeem deposit types that exceed the max exposure percent first, followed by deposits with the least Stalk per BDV across any deposit type.
- Hope is that Halborn will be able to wrap up the audit in the next few weeks so the Root DAO can propose an upgrade to the contract and documentation.
- Minters will be incentivized to mint using their newest Silo deposits, since the Roots they receive will effectively have the Stalk and Seeds of the pool average.
- The UI will be able to mint Roots using the optimal asset from the contract perspective, as long as there is no difference to the user in terms of the Roots they'd receive.
- The generalized Root markets are betting markets settled in the Root token.
- It consists of the Root Factory and the Token Factory, which allows anybody to create a betting market on top of any oracle as long as there is an interface for that oracle.
- Any address can be used as an oracle, as long as there is a translation/interface for it.
- That means anybody can create a parimutuel market on an if statement.
- Users can mint position tokens based on a decision that's on chain or from an oracle, and have any arbitrary payout or settlement from an oracle.
- Position tokens can get paid out based on a spread or any arbitrary scoring logic.
- Oracles can be used for many different markets.
- Position tokens are represented as ERC-1155s.
- The whole thing is currently in audit with Halborn, hopefully to be launched in the near future. Legal and regulatory considerations will factor into the offerings available at launch.
- The Root Factory creates the event prepares the oracle, and the Token Factory mints the position tokens.
- There is a fee assessed when you enter a position. Part of the fee gets distributed to people already in the pool, so there is some incentive to enter early. This is intended to deepen liquidity.
- Whether an event has a fee is chosen at the time of creation. Fees can be claimed for all eligible events at once.
The second module would be the terms