Both Aave & Compound use a pool-based system which tags their funds to various tokens on their platforms. This means that the solvency of any token will affect the entire platform.
Kashi's isolated lending architecture mitigates the risks to a specific pair only, thus enabling any token to be listed as an asset/collateral. It uses an elastic interest rate to incentivize liquidity into a certain range and oracles to provide price feeds for all tokens.
Feature | Aave, Compound and other lending platforms | Kashi Lending |
---|---|---|
Markets | Large pool with a variety of tokens | Single asset and collateral token pairing |
Risk | Systemic risk, any token that drops to 0 can cripple the entire system | Risk isolated to each individual market pair |
Asset listing | Protocol/DAO votes for assets to be listed | Users can create any market pairing they want at any time |
Interest rate | Fixed curve that is manually adjusted | Elastic. Responds accordingly to supply and demand |
Oracle | Chosen/maintained by the protocol | User decides on which oracle to use |
Liquidations | All profits go to the liquidator | Liquidity providers split the profits |