Overview
Last updated
Last updated
OrdiLend's money market, leveraging an over-collateralization model, simplifies the process for users to supply assets, secure loans, and earn $ODLD tokens as incentives for their participation. In this framework, users providing liquidity to OrdiLend's market receive Otokens, symbolizing their stake in the loan pool. The value of these Otokens increases over time due to the accumulation of interest, representing the users' share and the interest accrued on the pool's tokens. Upon loan settlement, users can exchange their Otokens for the initial deposit, now enhanced in value due to accrued interest.
$ODLD reward will be distributed in the form of esODLD.
Otokens serve as proof of the collateral furnished by lenders to OrdiLend. At the inception of OrdiLend, Otokens are set at a 1:1 exchange rate with the original tokens. This rate adjusts upwards as interest accumulates, altering the exchange rate proportionately (e.g., from ETH : OETH = 1 : 1 to ETH : OETH = 1 : 1.x, where 'x' represents the accumulated interest).
To initiate a loan, borrowers must enable the 'collateral switch', employing their deposited assets as collateral. This mechanism allows them to borrow in accordance with their asset value. For instance, by depositing USDC and borrowing against it, the USDC is transformed into OUSDC.
The value of OUSDC appreciates with the Supply APR, while concurrently, the amount of borrowed USDC increases due to the Borrowing APR. For example, depositing 100 USDC as collateral to borrow 50 USDC would result in obtaining OUSDC equivalent to 100 USDC, with a progressively increasing rate. The borrowed 50 USDC also accrues over time (to 51 USDC, 52 USDC, etc.). Settling the loan requires repaying the augmented amount, demanding prudent management as the borrowed sum can grow faster than the value of the collateral.
OrdiLend operates entirely within a 100% code-based ecosystem, removing the necessity for conventional intermediaries and streamlining operations. It incorporates an automated system for adjusting borrowing and lending rates based on predefined parameters, such as the capital utilization rate within the pool. An increase in the capital utilization rate, for instance, leads to higher interest rates, motivating borrowers to repay loans sooner and ensuring consistent liquidity levels for a secure and reliable user experience.
