To eliminate the limitations faced by certain lending platforms, SushiSwap has proposed a new lending solution known as BentoBox.
The BentoBox lending platform by SushiSwap will solve the limitations by employing isolated lending pairs, on-chain and off-chain flexible oracles. liquid interest rates, and contracts optimized for low gas. In addition, the ability to allow supplied assets to be used for flash loans can translate to extra revenue for suppliers.
Under new leadership by @0xmaki the team are pushing for some very cool products that aim to create more revenue streams on top of just their main exchange product:
BentoBox: Lending Solutionhttps://t.co/RmyhvsODuF
— Future Fund (@FUTURE_FUND_) November 15, 2020
Employing Isolated Lending Pairs
With the BentoBox solution, users are allowed to supply different collateral assets and still borrow another set of assets. In a case where one of the assets experiences a price drop quickly before liquidators can react, every asset and every user will feel the impact.
Once lending pairs are isolated, the creation of a new pair can easily be done by anyone. This new pair will be similar to a SushiSwap pair. If lending markets include very volatile assets with low liquidity, they may not be very safe and stable. However, some can still be very stable and safe with the right assets and liquidity.
The result is that risk is now limited to individual pools, and this risk will be reflected in the interest rates. A pool with a higher risk will attract fewer suppliers, and the interest rate will go up. Conversely, a pool with low risk will feature a lower interest rate.
With the creation of a pool, an oracle needs to be selected. Starting off, the pool will make use of basic oracles, but as time goes on, the system can be extended, and by then, anyone would be able to write a connector to an oracle. The basic oracles that will be provided are SushiSwap (UniSwap V2) Time Weighted Average Price and Open Oracle Price Feeds.
Liquid Interest Rates
The interest rate in each pool will have to be optimized to reach the ideal utilization. If the pool is not well utilized, the interest rate will drop over time. If this continues, it may reach 0%, pending when enough borrowers have arrived or supply has left. High utilization comes with high-interest rates until it goes back to its ideal rate. The parameters of reaching ideal utilization will be configurable for each individual pool. This means SushiSwap won’t have to manually configure the pools like other lending platforms do to achieve ideal utilization.
Contracts Optimized for Low Gas Use
Current implementations are very gas-consuming and are not very useful for users with smaller portfolios. The reason for this is that most of these contracts are not optimized for gas. Another issue is that some platforms have recently integrated governance tokens, which further increases the cost of gas for every transaction.
Notably, after SushiSwap’s liquidity mining scheme, assets worth over $1 billion were poured into Uniswap. This pumped the total value locked (TVL) in Uniswap to over $2 billion. However, Uniswap’s TVL glory was short-lived as the SushiSwap migration on September 9 took with it $1.3 billion worth of TVL and left Uniswap with pre-Sushi TVL.
As of the time of writing, SUSHI price was $1.29 with a 24-hour trading volume of $220,250,899. SUSHI price also went up by 7.4% in the last 24 hours. SUSHI has a circulating supply of 122 million coins and a max supply of 250 million coins. SushiSwap is the current most active market trading it.
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