# Isolated Lending Pool Mechanism

Avalon’s isolated lending pools are designed to optimize capital efficiency while minimizing liquidity and market risks. This unique approach ensures that users can participate in lending with a high degree of security and flexibility.

### Avalon operates three distinct types of lending pools, each tailored to the asset composition：

#### • BTC LSD Pool

Each BTC LSD token has its own isolated pool. This pool includes at least BTC LSD tokens and BTC. Stablecoins may be included, depending on the on-chain liquidity of the specific BTC LSD tokens. The Loan-to-Value (LTV) and liquidation parameters are adjusted to reflect the unique price risks of these assets.

#### • RWA Lending Pool

Each Real World Asset (RWA) token has its own dedicated pool. These pools contain RWA tokens and stablecoins, focusing on yield-generating RWAs with price stability and strong on-chain liquidity. LTV and liquidation parameters are optimized based on the price risks of these tokens.

#### • General Pool

This pool includes mainstream assets such as BTC, ETH, stablecoins, and more. It offers a diversified lending opportunity for a range of popular assets.

Avalon’s isolated pool structure ensures each asset class is managed with tailored risk parameters, maximizing both safety and efficiency for all participants.

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