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Overview

The Radian Lending protocol allows users to borrow and lend assets to the protocol. Unlike other lending markets the liquidity itself is both collateralized and lended from the corresponding liquidity pool on the Radian Exchange.

This allows shared liquidity for both trading and lending, which increases the efficiency of both markets.

If you think about the difference between providing liquidity on an AMM versus providing liquidity on a lending market, you'll see that the only difference between the two is the number of assets you provide. On an AMM you provide both the base and quote asset, while on a lending market you only provide the base asset.

So, to provide liquidity to the Radian Lending Market, you simply provide it to the exchange without providing the quote asset.

Also unlike other lending markets -- there is no "whitelist" of assets that can be borrowed or supplied, so long as that asset has liquidity on the Radian Exchange. Permissioning is mathematical rather than administrative.

Any asset you supply is automatically exchanged for RAD and then used to mint USDX. Therefore all lending and borrowing activity positively benefits all RAD holders.

Supplying Leverage​

When supplying liquidity to the lending market, you have the option of supplying two types of liquidity - free supply, and lockable supply.

The free supply can only be used for overcollateralized borrowing, and therefore can be withdrawn at any time.

However, you have the option of increasing your yield by also allowing traders who want to make leveraged trades to borrow against your liquidity. This is called "lockable supply" and is a way to increase your yield.

When a trader borrows against liquidity to make a leveraged trade, the borrowed liquidity is locked until the trader either exits the trade or becomes liquidated. When supply is used for a leveraged trade, this supply is considered "active". So long as the inactive supply is sufficient to cover your withdrawal, you can withdraw your supply at any time. When this is not the case, you can either wait, or create a withdrawal request which gets put into a queue than automatically gets fulfilled when a trader exits their trade.

Boosts​

Suppliers of liquidity have the option of receiving interest in the form of RAD rather than USDX. This is called a "boost" as the APR is increased in this scenario. When a boost is enabled, the collector will instead mint RAD in exchange for the yield, and send it to the collector.

Treasury​

The Money Market itself earns a yield on the spread between the borrow rate and the supply rate. Additionally, since liquidations are paid for by the protocol and swapped for the base asset in the exchange, the protocol also earns a yield on any additionally leftover assets. This extra yield is ultimately sent to the collector which serves as a means of distributing this yield to all RAD holders.

The parameters of the treasury which are governed by veRAD holders are as follows:

  • TARGET_RESERVE_AMOUNT - The amount of base asset that the treasury should hold in reserve. This is to ensure that the protocol has enough assets to cover liquidations and other unforeseen events.
  • MIN_TRANSFER_TO_COLLECTOR_AMOUNT - The minimum amount of base asset that can be transferred from the treasury to the collector. Since this function can be called by anyone, this ensures dusty transfers are not made to the collector.