Isolated Lending Pool Mechanism

Avalon employs isolated lending pool to maximize capital efficiency while minimizing liquidity risks and market risks.

Avalon employs three types of lending pools based on the collateral compositions:

  1. BTC LSD Pool: Each BTC LSD token has its own pool. The pool will include at least BTC LSD tokens and BTC. The inclusions of stablecoin depends on the on-chain liquidity of the BTC LSD tokens. The LTV and liquidation parameters are optimized based on the price risks of the assets.

  2. RWA Lending Pool: Each RWA token has its own pool. The pool will include RWA tokens and stablecoin. Currently Avalon focuses on yield generating RWA tokens which has price stability and deep on-chain liquidity. The LTV and liquidation parameters are optimized based on the price risks of the assets.

  3. General Pool: Mainstream assets are included in this pool including BTC, ETH, stablecoin and etc.

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