A deep dive into the functioning of LendBook
A lending limit order book is a non-custodial and permissionless order book that enables users to place and borrow the assets from limit orders. Borrowing positions are collateralized by sell orders. We have presented in previous posts its advantages. To mention a few, it provides lenders with interest rate-bearing limit orders and borrowers with stop-loss and take profit orders. It reduces liquidation penalties and enables high leverage. In addition to these benefits, the protocol is nativel...
A deep dive into the functioning of LendBook
A lending limit order book is a non-custodial and permissionless order book that enables users to place and borrow the assets from limit orders. Borrowing positions are collateralized by sell orders. We have presented in previous posts its advantages. To mention a few, it provides lenders with interest rate-bearing limit orders and borrowers with stop-loss and take profit orders. It reduces liquidation penalties and enables high leverage. In addition to these benefits, the protocol is nativel...
Reviving the debate between order books and AMMs
There is a longstanding debate about pros and cons of Automated Market Makers (AMMs) vs. Central Limit Order Books (CLOBs). While CLOBs are everywhere in traditional finance and centralized crypto exchanges, AMMs are the dominant market organization in blockchains characterized by high transaction costs and low TPS. Therefore, it is not surprising that a growing number of lending projects have chosen an AMM as a base layer to liquidate loans (to name a few: InfinityPools, Frax’s BAMM, Instada...
Reviving the debate between order books and AMMs
There is a longstanding debate about pros and cons of Automated Market Makers (AMMs) vs. Central Limit Order Books (CLOBs). While CLOBs are everywhere in traditional finance and centralized crypto exchanges, AMMs are the dominant market organization in blockchains characterized by high transaction costs and low TPS. Therefore, it is not surprising that a growing number of lending projects have chosen an AMM as a base layer to liquidate loans (to name a few: InfinityPools, Frax’s BAMM, Instada...
Exploring LendBook's Innovative Lending Mechanism
TL;DR : LendBook is a lending protocol built on an order book. Appending a lending functionality to an order book is done at no extra cost for makers. The new design allows makers to earn an interest rate and borrowers to benefit from high loan-to-value. Let's delve into a simple example in which Alice deposits a buy order. The ETH market price is 2600. Alice holds part of her wealth in stablecoins, anticipating that the ETH price may fall below 2500. However, since ETH is a top-tier ass...
Exploring LendBook's Innovative Lending Mechanism
TL;DR : LendBook is a lending protocol built on an order book. Appending a lending functionality to an order book is done at no extra cost for makers. The new design allows makers to earn an interest rate and borrowers to benefit from high loan-to-value. Let's delve into a simple example in which Alice deposits a buy order. The ETH market price is 2600. Alice holds part of her wealth in stablecoins, anticipating that the ETH price may fall below 2500. However, since ETH is a top-tier ass...
Introducing LendBook
Lending protocols are a central building block of blockchain applications. While they have amassed tens of billions of dollars in value, it's fair to say that the original design proposed by Compound and Aave has seen few improvements since then. Borrowers still rely on approximate metrics like the health factor to manage debt. They can only borrow a limited portion of their collateral's value and face early liquidations well before their collateral value falls below their loan amou...
Introducing LendBook
Lending protocols are a central building block of blockchain applications. While they have amassed tens of billions of dollars in value, it's fair to say that the original design proposed by Compound and Aave has seen few improvements since then. Borrowers still rely on approximate metrics like the health factor to manage debt. They can only borrow a limited portion of their collateral's value and face early liquidations well before their collateral value falls below their loan amou...
