iLend Pools

At the heart of iLend's ecosystem is the concept of "Lending Pools". Each Lending Pool consists of reserves in multiple assets, with the total amount in USD being defined as "total liquidity". These reserves can be borrowed against or used for margin trading purposes.

Users can deposit funds into the Lending Pool with the intention to earn interest. However, these deposited funds do not automatically serve as collateral for borrowing. Specific assets within each Lending Pool can be designated as collateral for borrow positions, which is controlled by the "Collateral" toggle switch that can be turned on and off as per the user's preference. To manage risk effectively, only low-risk tokens should be used as collateral. The amount that one can borrow is determined by the remaining assets available in the pool's reserves.

Every Lending Pool has a distinct "Collateral Ratio". This is calculated as the weighted average of the different Loan-to-Values (LTVs) of the currencies making up the collateral.

Borrow positions can be opened with either a stable or variable interest rate. These borrows have an indefinite duration, and there is no fixed repayment schedule. Users can make partial or full repayments at any time.

In case of price fluctuations, a borrow position might face liquidation. This happens when the price of the collateral falls below a certain level, known as the Liquidation Threshold. Upon reaching this threshold, a liquidation bonus is triggered. This incentivizes liquidators to purchase the collateral at a discounted price. Each reserve within a Lending Pool has its own Liquidation Threshold, which is calculated dynamically using the weighted average of the Liquidation Thresholds of the collateral’s underlying assets.

Liquidation of positions is primarily handled by the Liquidation Bot running on the iLend site. This bot automates the process of identifying and liquidating positions that have reached the Liquidation Threshold. However, the iLend ecosystem also allows for peer-to-peer liquidations. This means that users themselves have the ability to liquidate the positions of others that have fallen below the Liquidation Threshold. This not only helps maintain the overall health and stability of the Lending Pools but also provides opportunities for users to earn incentives from liquidations.

The Lending Pools, in conjunction with the Collateral Vault Contract and the Margin Positions Contract, form the foundation of the iLend ecosystem. The Collateral Vault Contract securely stores all assets and NFTs within the protocol but does not accept deposits. The combination of these components provides an optimized borrowing and lending experience for the users while ensuring the safety and integrity of the entire system.