Introducing Fluid!

On the Vault protocol, liquidations only happen until the liquidation threshold is met, nothing extra. This means for most liquidations the amount of debt liquidated is closer to 5% whereas on other protocols it can be up to 50% or 100% debt (full liquidation of position). On the Vault protocol, when users are liquidated, they will lose 5-10x less than on other borrowing protocols.

There are higher-level ecosystem benefits as well due to liquidating only what’s required. If all the users in the ecosystem are using the Vault protocol to manage their debt positions, then the negative externalities produced by forced selling and cascading effects can be reduced by 5-10x. Making the overall ecosystem more efficient and stable.

Lowest Liquidation penalty

Liquidation on the Vault protocol can be as low as 0.1% while in comparison to other protocols which are generally between 5-10%. Saving users up to 50-100x on liquidation penalties.

Oracles

Oracles are a critical component of any lending and borrowing protocol. They enable the timely liquidation of bad liquidity from the protocol and allow for efficient liquidity by providing up-to-date pricing information. By leveraging oracles, protocols can improve their overall security and potentially increase their loan-to-value (LTV) ratios.

The Vault protocol of Fluid utilizes an oracle system that combines Uniswap and Chainlink to ensure the most reliable and accurate pricing data (Oracle price comparison Dune). The protocol checks three different time-weighted average price (TWAP) checkpoints and the Chainlink price, comparing them with the current Uniswap price to verify that it falls within a specific range and has not been manipulated in any way. This ensures that the protocol can use the current DeFi price for liquidation purposes while removing the possibility of manipulation (or making it extremely costly).

For geeks wanting to involve in more technical explanation on how the overall vault protocol allocates liquidity & how the liquidation algorithm works. Follow our Whitepaper.

Note : Vault protocol v2: With the recent announcement of Uniswap v4, we have also proposed the most advanced ‘Oracleless’ lending protocol on top of v4. For more details, check out here.

DEX protocol

The DEX protocol is a novel protocol which introduces smart debt and smart collateral. This will empower users to utilize their debt and collateral as liquidity for trading purposes. The v1 of DEX protocol will be similar to a combination of Uniswap v2 & Uniswap v3 - Single auto rebalancing range order, UX like Uniswap v2 & concentration like Uniswap v3. V2 can be based on Uniswap v4 (still in ideation phase).

Smart collateral pools is like any AMM pool, where users can earn from trading fee while simultaneously lending their collateral & borrowing against it. On the other hand, the smart debt pools can be considered as an inverse of any AMM pool, allowing borrowers to use their debt as liquidity and getting discount on debt through trading fees.

By leveraging these innovative features, users will be able to access the best rates in the ecosystem, earning more on their collateral and receiving discounts on their debt. The DEX protocol is the only protocol which allows your debt to be a productive asset.

Smart Debt