Stellar Community Fund

By XycLoans

XycLoans

SCF #13

$31.8K

Legacy v4.0 Award

Awarded

A flash loans protocol with its own liquidity management on Soroban.

Products & Services

Our goal is to finish building in ~3 months the working prototype of a decentralized ecosystem to borrow money through flash loans and to generate healthy yield by lending. As the term "ecosystem" hints, we envision XycLoans not only as a protocol but as a protocol + other components, making it effectively an ecosystem. There are 4 main components in XycLoans: the smart contracts, backend functions to build a database, scale, and make the front end faster, a web app to graphically develop contracts that use flash loans without coding knowledge, and a high-quality web app for lenders to manage their liquidity.

We have already written the PoC contracts for the protocol, which can be found here. We also already have simple tests that show how borrowing and lending would work and we are looking forward to making more complex tests for edge cases. The specifics of how the protocol works are written in the Litepaper, which we recommend reading (sections 4 and 5) if you wish to understand the math and workflows under the hood when lending and borrowing.

In order to scale more efficiently and make the front ends faster, we'll write and deploy a set of backend functions that listen for contract events such as when the vault mints new fee shares or when the vault pays out the yield to lenders. The functions will subsequently build a database that can be queried by the front end (for example, the total profit of a lending token pool).

Flash loans usually target developers and other DeFi protocols, but having a web app like Furucombo that allows leveraging flash loans and profit from them will expand the target audience also network-wise.

In a DeFi protocol, a high-quality web app that allows investors to manage their money is crucial. This web app will allow lenders to efficiently provide and monitor their liquidity in the various token pools, and know how much yield they are earning.