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The Ajna protocol facilitates peer-to-pool secured loans without governance and without external price feeds. Current lending and borrowing protocols which utilize smart contracts require active governance (e.g. to set rates and to update contracts) and/or rely on external price feeds (such as oracles like Chainlink). Because the pricing of collateral and parameterization of loans are left to subjective decision making through governance rather than market forces, these protocols carry both solvency and liquidity risk. Governance and maintenance overhead create barriers to entry in the market for lending and borrowing of on-chain assets. Ajna solves these problems with its unique design, which is defined by the following features: Permissionless pool creation: Much like the popular DeFi primitive, the “automated market maker,” AMM, Ajna pools exist in unique pairs: quote token, provided by lenders and collateral token, provided by borrowers. Pools allow lenders to assess borrower demand for their quote token and for borrowers to assess lender demand for loans backed by their collateral. Pools are created permissionlessly, meaning anyone can create a pool to borrow arbitrary fungibl...
The Ajna protocol facilitates peer-to-pool secured loans without governance and without external price feeds. Current lending and borrowing protocols which utilize smart contracts require active governance (e.g. to set rates and to update contracts) and/or rely on external price feeds (such as oracles like Chainlink). Because the pricing of collateral and parameterization of loans are left to subjective decision making through governance rather than market forces, these protocols carry both solvency and liquidity risk. Governance and maintenance overhead create barriers to entry in the market for lending and borrowing of on-chain assets. Ajna solves these problems with its unique design, which is defined by the following features: Permissionless pool creation: Much like the popular DeFi primitive, the “automated market maker,” AMM, Ajna pools exist in unique pairs: quote token, provided by lenders and collateral token, provided by borrowers. Pools allow lenders to assess borrower demand for their quote token and for borrowers to assess lender demand for loans backed by their collateral. Pools are created permissionlessly, meaning anyone can create a pool to borrow arbitrary fungible tokens using arbitrary fungible or non-fungible tokens as collateral. Therefore, no governance process is needed to whitelist approved tokens. Price specified lending: Ajna replaces external price feeds (oracles) by allowing lenders to input the price at which they’re willing to lend. This price is the amount of quote token (i.e. the token they are lending) they are willing to lend per unit of collateral pledged by the borrower. For example, if a lender deposits at price 100, they are willing to lend 100 units of quote token per one unit of collateral. Ajna pools separate prices into predefined buckets to reduce the complexity of the protocol, prices are therefore hereon referred to as “buckets”. Borrowers are then able to borrow from the aggregated liquidity of these various buckets.
Ajna Protocol is a peer-to-pool secured lending solution operating without governance and external price feeds. Traditional protocols often require governance to set rates and reliance on oracles for price feeds, which can introduce solvency and liquidity risks. By enabling permissionless pool creation and removing governance layers, Ajna protocol mitigates these risks and simplifies market access for on-chain asset lending and borrowing.
Ajna Protocol forgoes traditional oracle-based pricing by allowing lenders to specify the price at which they are willing to lend. Lenders input how many units of quote token they will lend per unit of collateral, and these entries are organized into 'buckets.' This system of predefined price buckets reduces protocol complexity and facilitates a market-driven lending environment, rather than depending on external price feeds.
Ajna Protocol provides several advantages: it eliminates the need for governance intervention and oracle dependency, reducing overhead costs and risks associated with these elements. The protocol supports permissionless pool creation, allowing a wide range of fungible and non-fungible tokens as collateral. This results in greater flexibility and accessibility for users seeking to lend or borrow on-chain assets, enhancing liquidity and market dynamics.
Yes, in Ajna Protocol, anyone can create a lending pool due to its permissionless design. To establish a pool, a user selects a pair comprising a quote token (provided by lenders) and a collateral token (provided by borrowers). This feature removes the necessity for governance approval, allowing broader participation by eliminating traditional barriers in the lending and borrowing markets.
Ajna Protocol enhances security by removing subjective decision-making from the loan process and eliminating governance layers, which are common sources of frictions and risks in other protocols. By empowering market participants to determine and agree on pricing directly, without centralized or external datasets, Ajna minimizes liquidity and solvency risks while ensuring a decentralized, transparent lending environment.
Ajna Protocol supports a wide range of tokens for collateral and lending, enabling the use of arbitrary fungible or non-fungible tokens. Pools within the protocol can be created without needing governance approval, allowing them to include any tokens participants wish to lend or use as collateral. This flexibility caters to diverse asset types, aligning with users' specific needs and enhancing the protocol's applicability in the crypto ecosystem.
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