đĻLiquidity Pools
How do we scale? Where is the liquidity coming from?
Last updated
How do we scale? Where is the liquidity coming from?
Last updated
Robox is following a protocol-to-user model for the liquidity pools. From a user's perspective, this model offers several advantages:
Easy Loans: The unified pool simplifies loan matching, providing quick access to loans against NFTs. Borrowers can tailor loan positions based on their preferences and strategies.
Competitive Rates: The protocol sets interest rates based on market conditions, ensuring fair rates for borrowers.
Experience: The platform's risk assessments ensure a fair evaluation of NFTs as collateral, ensuring lenders and borrowers won't use high LTV and get rekt.
For lenders, the Robox pool functions as a simplified and efficient way to earn returns on staked SOL by providing liquidity to the platform. Here's how the process works:
Deposit: Lenders deposit their tokens (e.g., SOL) into the Robox unified liquidity pool. By doing this, they contribute to the total available liquidity for borrowers.
Earn: The platform utilizes the deposited funds to provide loans to borrowers, who pay interest on their loans. Lenders earn a portion of this interest as a yield on their deposited assets + liquation fees and trading fees (implemented in the future).
Risk-free: By participating in the unified pool, lenders' funds are spread across multiple loans, reducing the risk associated with individual NFT price fluctuations. This diversification helps mitigate potential losses and ensures a more stable return on investment.
Passive Yield: Lenders do not have to actively manage their investments or evaluate the creditworthiness of borrowers. They simply deposit funds into the pool and earn a passive yield through the interest paid by borrowers.
Withdrawal: Lenders can withdraw their deposited assets along with the accrued interest at any time, subject to any platform-imposed withdrawal limits or lock-up periods.
In summary, the Robox pool allows lenders to deposit funds, which are then used to provide loans to NFT holders. Lenders benefit from risk diversification, passive yield generation, and the ability to withdraw their investments with earned interest at their convenience.
