We are thrilled to announce our integration with Curve Llamalend!
Our good friends at Curve have added a one-way market for UwU and integrated our platform. Moving forward, UwU holders can deposit their tokens on Llamalend and use them as collateral. Depositors will be able to borrow crvUSD against their UwU and suppliers will receive APY in the form of crvUSD. Additionally, suppliers can stake their Vault Share Tokens to receive UwU rewards.
The innovative Llamalend enables permissionless borrowing by offering solely one-way markets. All available markets are isolated and use a single type of collateral. The most remarkable feature for borrowers is the soft liquidation mechanism, enabling extra layers of protection against liquidations and offering customized risk settings. Lenders take advantage of 100% fee distribution. We are happy to be one of the first collaterals added and participate in this new way of lending.
Curve Llamalend
Llamalend is the proprietary lending platform of the Curve ecosystem and is currently available in its beta version. It’s not just another traditional lending market though but comes with several innovative and clever mechanisms to set it apart.
Isolated Borrowing
One of the features that stands out is isolated borrowing by offering only one-way markets. All available markets are isolated and use a single type of collateral. Users can deposit the collateral and borrow crvUSD (or supply crvUSD to borrow another asset) against it.
The crux: new markets can be permissionlessly deployed by anyone, at any time as long as suitable oracles exist or custom oracles are created. This offers a variety of options, including implementation of low liquidity markets. Of course, this also comes with additional risks and responsibilities for potential suppliers.
Soft Liquidation Mechanism
Rather than setting fixed LTV parameters and triggering partial or full liquidations once the position is under said parameters, Llamalend implements an additional layer of protection for borrowers called “soft liquidations’.
When creating a loan, users can set up to 50 bands or opt to have 10 automatically assigned bands when not using advanced mode. Each band is set to a price range, similar to a v3 on Uniswap which concentrates liquidity between two prices and as well sets the collateral value. Fewer bands in high price ranges equal higher LTV and more risk, while more bands over a bigger price range offer less LTV and lower risk of total liquidation. This unique system allows the user to set parameters based on their personal risk appetite.
Once the oracle price hits the price range of a set band, part of the collateral is converted to crvUSD. If the price of the collateral asset rises again, the LLAMMA system will automatically convert crvUSD back to the collateral asset. Only in extreme volatile situations when all band price ranges are triggered and the Health Factor reaches 0 will a standard liquidation be triggered.
Supply Vault Shares
Suppliers are given Supply Vault Shares as a receipt token. These tokens represent their share of the total supply in the individual market. The value of these tokens increases automatically based on the lending APY and automatically compounds. Some markets offer Vault Share Token staking for additional rewards. Our own market on Llamalend will receive UwU rewards; others have CRV incentives. These extra rewards can be claimed at any time and staked Vault Share Tokens are not locked.
UwU on Llamalend
Our own market on Llamalend has a starting LTV of 55%. Due to the band system, final borrow allowances and liquidation thresholds vary, so be sure to check when creating your loan position. In case of a hard liquidation, the dynamic liquidation discount applies, which encourages others to participate in the liquidation process.
We recommend checking out the curve lending docs and getting familiar with the unique band system before creating a loan for the first time. Tip: Toggle to “advanced” for more options and statistics on markets.
To supply and stake your Vault Share Tokens, simply connect your wallet and select the UwU market. You can see the current APY and UwU rewards percentage on the dashboard. No admin fee applies on the UwU market, so 100% of borrow fees go to the supplier vault and are split between suppliers based on their total vault supply share. Staking Vault Tokens will reward UwU Tokens. See https://resources.curve.fi/lending/supplying-assets/ for more information and detailed tutorials.
We are excited to be part of this new development for the Curve ecosystem and to add another utility option for UwU holders!
