The Spindle Protocol
How It Works
You begin your journey with Spindle Finance by supplying assets. You earn interest on the assets you provide, and can now use your deposits as collateral to borrow other assets from the reserves.
You can use the assets you've borrowed however you like. Hold them, swap them, or use them in other DeFi protocols according to your needs. Keep an eye on your position, however! If your borrow position health gets too low you can be liquidated to protect the protocol.
You can repay part or all of your loan at any time. Partial repayment can be used to manage your position health and avoid liquidation risk. Full repayment is necessary to withdraw all your collateral assets.
You can withdraw portions of your collateral at any time, as long as your position health remains sufficient. If you've repaid all your debt, you can withdraw all your collateral.
Architecture
The Pool is the single entry point to the Spindle Finance protocol. Lenders and borrowers interact with this contract to supply assets, take out loans, repay borrowed assets, and withdraw from the protocol.
The pool communicates with a Market for each listed reserve asset. Assets supplied to a standard market can be used as collateral to borrow other assets.
Capabilities
Spindle finance has a robust suite of capabilities to facilitate efficient capital usage beyond simple lending and borrowing.
Flash Loans
Spindle supports flash loans, where a transaction can borrow assets without providing collateral, as long as the full amount is paid back in full plus a fee by the end of the same transaction. This is a powerful tool for arbitrageurs, allowing them to efficiently balance DEX pools without having to tie up a large capital pool.
Isolated Markets
Spindle's isolated markets are a risk management tool which can be used to manage riskier collateral types. Isolation mode assets can only be used to borrow a specified list of stablecoins, and cannot be used to borrow other risk-on assets.
Siloed Markets
A siloed market asset cannot be borrowed in conjunction with any other asset, providing a complimentary control to isolated markets. Siloing an asset helps prevent an issue with that asset spilling into the broader protocol.
Efficiency Mode
Efficiency mode allows a different set of parameters, including Loan-To-Value, liquidation settings, etc. to be configured for asset categories with correlated price behaviors, like stablecoins or liquid staking tokens. This allows users to utilize more of their position in scenarios when the risk associated is minimal.
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