Three minutes quick overview of Sushi lending product Kashi

BentoBox is a liquid token funding pool for asset-bearing interest.

Three minutes quick overview of Sushi lending product Kashi

What is BentoBox?

BentoBox is an asset-based liquidity token pool. Anyone can provide liquidity to it and anyone can develop on top of it. the first product Sushi developed on top of BentoBox is Kashi, a lending protocol.

What is a risk-isolated marketplace?

A risk-isolated market is a market where risk is not shared collectively. Whereas platforms like Compound and Aave must limit their acceptance of collateral to a selected set of tokens because risk is shared collectively on their platforms, BentoBox uses risk-isolated markets that allow users to provide liquidity for any token. If a pair on BentoBox were to fluctuate dramatically, it would only affect the market for that pair, not the entire platform.

How do I lend on the market and receive interest?

If you provide token liquidity to BentoBox, other users will borrow the token liquidity you provide and you will earn interest from the moment they start borrowing. The tokens that are lent the most earn the most interest.

How do I lend to the marketplace?

To lend on Kashi, you first need to provide another token in a liquidity token pair. If you want to lend LINK, and there is currently only a LINK/ETH pair in the market, you will have to first pledge to provide ETH liquidity to lend LINK.

How do I create a marketplace?

To create a market, you need to add a new pair. Assuming you want to add DEUS/DEA and ETH/INV pairs, you can do so by clicking on “Create New Market” and then finding the token you want to pair with. It is not necessary to add liquidity to create a pair, but other people who need to borrow from the pair will need to add liquidity. Underutilized pairs will be less liquid due to flexible rates, and vice versa.

What is the flexible rate?

The flexible rate is a means of incentivizing liquidity to fluctuate within a desirable range (70 – 80%). The flexible rate is optimized based on utilization (borrowed assets/total assets) and is capped at the minimum utilization rate by halving the rate every 8 hours if utilization is below the minimum target utilization rate. If the utilization rate exceeds the maximum target utilization rate, the rate doubles every 8 hours.

Three minutes quick overview of Sushi lending product Kashi

Why is the borrowing rate higher than the supply rate?

The borrowing rate is higher than the supply rate because the collateral is never used to its maximum extent, so the borrowing rate is always slightly higher.

There is also a charge for borrowing and this charge goes to reserves, which is why the borrowing rate is higher.

Can xSUSHI, XYZ and LP tokens be used as collateral?

Currently BentoBox does not support these collaterals, but will be open to support them in the future.

Do tokens support rebase mechanism?

Currently BentoBox does not support tokens with rebase mechanism.

What is the difference between BentoBox balance and wallet balance?

Your BentoBox balance earns revenue from lightning loans, machine gun pools or other strategies adopted by the community, so the balance in BentoBox grows; your wallet balance represents the amount of tokens you have in BentoBox (this amount does not change).

What are the benefits of using token pairs?

The benefits of using token pairs are similar to the benefits of using AMM. Token pairs create a more open marketplace. Specifically, users of token pairs are able to calculate and understand the risks they are taking. The ability to calculate and take these risks opens up a new space for game theory to be explored. For example, if users provide new tokens, they can increase their lending revenue because token pairs containing new tokens are typically lent more, but when they do so, they also increase their risk because the new tokens have a higher default rate. On the other hand, if users provide more battle-tested collateral, their interest rates will be lower and their risk lower, but they also get less from the collateral because there will be more supply and less demand.

What is the difference between Kashi and Compound and Aave?

The main difference is that Kashi uses lending token pairs, a risk-isolated market. Whereas Aave and Compound both calculate risk on a global scale, and the solvency of any token affects the solvency of the entire platform. One important consequence of using risk-isolated markets is that Kashi allows any token to be shelved. Another important consequence is that flexible interest rates are used to incentivize liquidity within certain limits. Another consequence of lending token pairs and risk-isolated markets is that Kashi’s prophecy machine needs to be customizable to provide price feedback for an unlimited number of tokens.

The following are superficial differences between Kashi and lending protocols such as Aave and Compound.

Three minutes quick overview of Sushi lending product Kashi

Is there a fee to use BentoBox?

Yes, there is a fee of 10% of interest earnings and 10% of closed liquidated items to SushiBar (xSUSHI).

Why do my interest rates go up or down?

Interest rates fluctuate up and down relative to the market utilization rate. If utilization is below 70%, rates will go down, which will incentivize borrower utilization; if utilization is above 80%, rates will go up, which will incentivize vendor utilization and discourage lending. The purpose of this is to incentivize liquidity within a desirable range because we don’t want liquidity to be overutilized (unmet demand) or underutilized (oversupplied).

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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