Morpho - APY Optimiser
peer-to-peer solution built on top of lending pools Compound & AAVE
matching lenders & borrowers that lenders receive interest payments paid by the borrowers they are paired with, achieve 100% utilisation rate
solve the spread that there're more leaders than borrowers on general liquidity pools lead to low capital efficiency
if original interest of lending is 1% & borrowing is -3%, such matching allows lenders to get more than 1% & borrowers less than -3% annually
Peer-to-Peer (P2P) & Peer-to-Pool (P2Pool)
P2Pool is used by general lending protocol, where all funds are in shared pool
lenders share the interests paid by the borrowers proportionally to their share of the pool
borrowers are able to utilise all capital in the shared pool
P2P is built on top of P2Pool that enhances capital efficiency
lenders and borrowers are matched together directly without going through a pool
lender gets the interest paid by the borrowers that matched with the entirety of the capital he lent
Peer-to-Peer Matching Engine
Lenders deposit liquidity to the pool, then matches with the larger borrowers first and so on
borrowers ask for a loan, the demands are matched with the larger lenders first and so on
this mechanism sorts users by descending volume that maximises matched volume & minimises gas
max gas for matching is set to avoid a big volume matches with multiple tiny volume that costs a lot of gas
fall back may happen when no cost efficiency pairs found
no fall back: lender matches with sufficient borrowers within max gas
partial fall back: lender partially matches with some borrowers, partial capital interest improved & partial falls back to underlying pool
fully fall back: lender cannot find any matchable borrowers, earn from underlying pool
withdrawal of lender can happen before borrower repays the loan
the protocol rematch other lender, or uses borrower's collateral to borrow corresponding assets
so borrower remains in the pool & lender can do instant withdrawal
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