Overview
Abax is a decentralized lending smart contract protocol with a lending pool design. It is a system that operates on a blockchain network in a decentralized and transparent manner. It enables individuals to lend and borrow digital assets (such as cryptocurrencies) without the need for traditional intermediaries like banks.
Here's a breakdown of how the Abax lending protocol works:
Lending Pools: At the heart of the protocol are the lending pools. These pools contain a collection of deposited assets that are managed by the smart contract deployed on the blockchain. Each pool represents a specific cryptocurrency or token.
Depositors: Users can become depositors through interaction with smart contract by supplying their digital assets to the lending pools. By doing so, they contribute to the liquidity of the protocol. Depositors earn interest on their deposited assets, as borrowers pay interest on the amount they borrow.
Borrowers: Individuals who require funds can become borrowers by collateralizing their digital assets and borrowing from the lending pools. Borrowers can access funds either in an overcollateralized manner, where they provide more collateral than the borrowed amount, or in an undercollateralized manner (flash loans) where they repay the loan within a single atomic transaction.
Interest Rates: The interest rates on deposits and debts are dynamically determined by the supply and demand within each lending pool. The rate for each asset is calculated based on the utilization rate and the asset's risk profile.
Governance: Abax Lending Protocol is managed by the Abax decentralized autonomous organization (DAO). The Abax DAO allows ABAX token holders to participate in the decision-making process, proposing and voting on changes, upgrades, and parameters of the protocol. This enables the community to have a say in the evolution and governance of the lending protocol.
Overall, the Abax lending protocol with a lending pool design allows users to lend or borrow digital assets in a trustless and permissionless manner. It leverages blockchain technology and smart contracts to create a transparent and efficient financial ecosystem that is not reliant on traditional financial intermediaries.
Last updated