Lending
Last updated
Last updated
Users can lend on Ajna through any applications that plug into the protocol.
Users choose what valuation they are willing to lend against by depositing tokens into specific price buckets.
Easy
Other apps (soon)
Advanced
Use to build an interface or bots
Users can lend any ERC-20 token. Users cannot lend ERC-721 NFTs or NFT Collections, or any other NFT types.
The following types of tokens are incompatible with Ajna, and no countermeasures exist to explicitly prevent creating a pool with such tokens, actors should use them at their own risk:
NFT and fungible tokens which charge a fee on transfer.
Fungible tokens whose balance rebases.
The following types of tokens are incompatible with Ajna, and countermeasures exist to explicitly prevent creating a pool with such tokens:
Users can lend their ERC-20 tokens against any ERC-20, ERC-721, or 721-subsets.
The following types of tokens are incompatible with Ajna, and no countermeasures exist to explicitly prevent creating a pool with such tokens, actors should use them at their own risk:
NFT and fungible tokens which charge a fee on transfer.
Fungible tokens whose balance rebases.
The following types of tokens are incompatible with Ajna, and countermeasures exist to explicitly prevent creating a pool with such tokens:
Deposit Fee All deposits incur a small fee equivalent to 8 hours of interest. The fee accrues on any new deposit, and any action which moves quote token down in price. The fee is not applied to actions which move quote token up in price.
Transaction Fees These are fees that are charged on blockchain transactions generally, the more complex the transaction, the larger the fee.
Creates a need to more closely micromanage the position. Meaning the lender will need to move their deposit lower as the market price approaches their deposit's price bucket.
Risks getting traded against at an unfavorable price if the market price crosses below the deposit's price bucket. Deposits are always swappable for collateral at the price of their buckets.
Risks deposit being temporarily frozen, since the highest valued deposits are frozen first during a liquidation. The lender may have their deposit swapped for collateral when this occurs.
Depositing too low:
May result in the deposit not earning interest if it is below the Pool's Highest Threshold Price (HTP).
The price buckets should be somewhere below 1 / market-price. An example would be the USDC/AAVE pool where USDC is collateral in AAVE is the quote token.
Occasionally users may want to move their deposits to different price buckets. Monitoring the market price of the collateral token is key to making such decisions.
As the collateral price drops, users may want to consider moving their deposit down.
As collateral price increases, users may want to consider moving their deposit up.
Theres a method in ‘PoolInfoUtils.sol’ lpToQuoteTokens which will convert the lp tokens into the equivalent amount of quote tokens so you could then use the quote token price multiplied by the number of quote tokens in your LP token.
Yes, unless the assets are frozen due to an active liquidation or if moving them results in the LUP moving below the HTP.
The protocol gets hacked or exploited.
Your quote tokens are traded against for collateral at an unfavorable price.
If no one posts a bond and the position sits undercollateralized...
As a result of interest, bad debt accrues.
If no one bids on a liquidation and the collateral is sold for close to 0, bad debt can result.
To cover the bad debt, reserves are depleted first and then the lenders from the highest price buckets down.
There are three scenarios when a lender can lose their deposit:
If the protocol gets hacked or exploited.
If a lender allows the market price to cross below their deposit's price bucket someone can trade collateral for their deposit, leaving the lender with collateral instead of quote tokens.
If there is bad debt and reserves are insufficient, lenders risk losing part or all of their deposits.
A lender cannot withdraw deposit if doing so would move the LUP below the HTP, as this would result in liquidation eligibility for one or more loans.
A borrower's position can be liquidated if the pool's LUP is below their TP.
If a lender wishes to remove deposit from a bucket that will cause the LUP to move below the HTP, they will need to liquidate the loan(s) that sit between the two points.
if there are active liquidations in the pool, deposits that are within liquidation_debt (amount) of the top of the book cannot withdraw until the liquidations are complete.
If a borrower defaults, their loan will go through the liquidation process where the collateral is sold to cover the debt. The sale occurs through a Dutch Auction and can utilize lender deposits at the top valued price buckets. Lender deposits at the highest priced buckets are at risk to be traded against, leaving depositors with the options of claiming the collateral and selling it to retrieve their deposit, or to wait for someone to trade quote tokens for the collateral at that price.
Notifications are not a native feature of the Ajna Protocol. Please check with the application you are using or other 3rd parties for notification services.
Fungible tokens with more than 18 decimals or 0 decimals, whose decimals() function does not return a constant value, or which do not implement the optional function.
Fungible tokens with more than 18 decimals or 0 decimals, whose decimals() function does not return a constant value, or which do not implement the optional function.
Check out this short video tutorial: Deciding on a price depends on the lender's risk tolerance. Both depositing too high and too low have risks. Depositing too high:
To learn more check out
How much a lender earns depends on the pool and the To look at pools and their lender rates, check out Rates are subject to change every 12 hours, in x1.1 or x0.9 increments.
A portion of the interest goes to the pool's reserves and is used to provide a liquidity cushion to lenders, and absorb bad debt if some should occur. This (NIM) is approximately 10% of the interest rate revenue.
All deposits above a pool's HTP earn interest at the same rate. In the event that the HTP is above the LUP, usually during active liquidations, all deposits above LUP earn interest at the same rate. For more details see section 8 of .
