Lending AMM

Automated Market Maker

Sodium Lending AMM is a first of its kind mechanism which combining multiple lender's (peer/pool) liquidity into one loan.

When a new loan request is created, the Lending AMM compares all existing Lending Pool terms, providing the most efficient liquidity combination to the borrower in the form of a Lending Queue. Liquidity from the different pools will be provided to open requests on favorable terms to the borrower, following the same rules and taking the same risks as any other Lender in the Lending Queue.

Market Making Rules

To find the best combination of liquidity the Lending AMM follows a few simple priority principals:

Lowest APR-> Highest LTV-> Highest Available Liquidity

Priority is always given to the pool with the lowest APR, the highest LTV and the highest AL.

Every pool added next to the Lending Queue (bottom to top) must have the lowest APR of all available pools and the LTV higher than previous pool's. If there are multiple pools with the same APR, the pool with the highest LTV ratio has a priority. If there are multiple pools with the same APR and the same LTV ratio, the pool with the highest Available Liquidity has a priority.

To help visualize how our Lending AMM works, we've created a Liquidity Map based on hypothetical Pools and Peers

Every time a Pool's terms matches the requirements of an open Loan Request, the liquidity will be automatically allocated into that Loan Request's Lending Queue.

Last updated