Stellar Community Fund

By Slender

Slender

SCF #17

$149.3K

Legacy v4.0 Award

Awarded

P2P money markets for Stellar ecosystem.

Products & Services

Slender is a Soroban implementation of a P2P pooled lending protocol. Slender is a decentralized non-custodial liquidity protocol where users can participate as lenders or borrowers. Lenders provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an overcollateralized (perpetual) or undercollateralized (single block liquidity) fashion. The interest rate in Slender is dynamically determined by the market supply and demand mechanics. Therefore, the borrow and supply interests could vary in different blocks. The main factor which the interest rate relies on is utilization which represents the relative amount of borrows to the total cash in the given market. Classical protocols such as Aave and Compound utilize step-wise functions to control interests when utilization is high. We propose to use a hyperbolic function for the same purposes, as it's smooth, doesn’t have any inflection points, and behaves similarly in nature. Slender codebase will serve as an important resource for the growth Stellar DeFi ecosystem. Providing a secure Soroban proof-of-concept implementation of the codebase will make it easier for new teams to enter the ecosystem and begin building. We will release the simple UI for the interaction with the protocol. This protocol will serve as a proof of concept and will be released as open-source software. There will be no DAO or utility token, just an open-source protocol that any Soroban project can use as a building block. We further plan to make a follow-up application that will extensively experiment with the no-liquidation approach in relation to collateralized position management within the protocol. The idea is akin to delta-hedging. The collateral portfolio will be periodically traded in and out of stablecoins depending on its performance, imitating the behavior of the protective put option and eliminating the need for position liquidation. However, we must admit that this setup is only possible with 3rd party AMM liquidity and oracles/backend to control periodic portfolio rebalancing.