🏦Moai Lending

As a multi-chain DeFi protocol, Moai Finance establishes lending markets to extend the utility of users’ idle assets. To provide efficient financial options to optimize their benefits and hedge investment risks, the implementation of a lending protocol can evolve correspondingly with the DeFi landscape to solve liquidity fragmentation. Moai Lending is a decentralized, non-custodial liquidity protocol that enables the supplying and borrowing of different assets from liquidity pools, and earning interest on supplied assets.

Boost Utilities with Lending Markets

Based on Compound, Moai lending can offer various advantages to investors and traders by creating lending markets with the composability of tokens. Despite competitively higher APY from LP supply than lending, risks from the price volatility affect the principal tokens like the impermanent loss. On the other hand, by depositing tokens to the lending market, suppliers can keep the principle and passively gain incentives from lending supply APY. Given that XRP lacks a native staking yield function, creating an XRP market initiates a new way of earning incentives by depositing idle assets. Through lending markets, suppliers can earn additional returns by depositing long-term investment tokens, while borrowers can get an opportunity to utilize borrowed assets instead of selling spot assets.

Supporting Assets

Available Assets: $ROOT, $XRP, $USDC

Supplying

As suppliers deposit their tokens and increase utilization of lending markets, they can earn interest without having to manage their assets or losses. Interest accrues algorithmically with each block and the APYs of lending pools adjust based on supply and borrowing demands.

Borrowing

Borrowing allows users to access liquidity without divesting assets. Users typically borrow for unforeseen expenses, to leverage their holdings, or to explore new investment prospects by reducing inventory costs of holding spot assets. Before borrowing, users must provide an asset to serve as collateral.

Liquidation

Liquidation is initiated when a borrower's health factor falls, indicating that their collateral value no longer adequately covers their loan or debt value. This situation can arise from a decrease in the collateral's value or an increase in the borrowed debt's value relative to each other. To maintain decentralization, the protocol incentivizes participants to undertake liquidation tasks rather than relying on a central authority. Mostly all of the risky borrowings are quickly liquidated once they cross the liquidation threshold.

• Interest rate: Interest rates for each market are updated whenever there is a change in the ratio of borrowed assets to supplied assets in that market. The mechanism for generating interest involves enabling borrowers to borrow assets previously provided against collateral, and subsequently repay them with interest. The adjustment in interest rates is determined by the interest rate model smart contract implemented for the market, as well as the extent of change in the ratio of borrowed assets to supplied assets.

• Health Factor: The Health Factor is a numeric measure indicating the safety of the position relative to its liquidation threshold. A higher value signifies a more secure position, providing greater protection against liquidation.

• mToken: mTokens are tokens for suppliers, increasing in value relative to the underlying asset gradually by exchange rate. Suppliers can earn interest over time and gain the ability to use mTokens as collateral.