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The v3 Lending Market will be housed within the v3 interface, with contracts being inspired by Aave v2. The Lending Market is a core module within Thetanuts Finance v3, enabling users to go long or short on on-chain options.
- Supported Assets: The Lending Market will support $XYZ-C, $XYZ-P, $XYZ, and $USDC assets.
- Flash Loans: Similar to Aave v2, the Lending Market will enable flash loans - allowing users to borrow up to 95% LTV, implying a theoretical 20x leverage limit on long positions. In reality - the leverage on a long position may be lower due to slippage, price impact, and fees on the AMM.
- Interest Rates: The Lending Market will use a fixed interest rate model between epochs, which can be changed in the future based on governance.
- Lenders: Lenders can deposit Basic Vault LP Tokens (i.e. $XYZ-C, $XYZ-P) or Collateral Assets (i.e. $XYZ, $USDC) into the Lending Market, and receive interest from Borrowers.
- Borrowers: Borrowers can borrow Basic Vault LP Tokens from the Lending Market, and sell them on the AMM - achieving a long call or long put position.
After a user opens a short call or short put position, the user will be prompted to “Boost” – which deposits the Basic Vault LP Tokens into the Lending Market. By providing liquidity on the Lending Market, Lenders generate yields in the form of Lending Interest. The Lending Market will use a fixed interest rate model between epochs, which can be changed in the future based on governance.
In the future, Thetanuts Finance v3 will enable users to deposit $XYZ and $USDC into the Lending Market for users to generate Lending Interest as well.