LiquidiFi - Next Generation Liquidity As A Service Protocol

Inspiration

Liquidity is always the key part in a DeFi world, all the projects is building a deep liquidity moat to widen the competitive advantage over the rivals, and thats why the Curve/Convex War is fighting everyday. We are watching this Phenomenon and want to build a fundamental protocol to serve everyone that want to compete for their liquidity, we hereby describe our product: Liquidity As A Service Protocol.

What it does

Liquidifi is a decentralized and composable protocol that has 3 parts:

1) Lending and borrowing. Just as AAVE/Compound does, we will deploy a basic lending component in Aurora, that fill the gap in the ecosystem, and meanwhile get plentiful liquidity to support our liquidity voting system.

2) Over-collateralized stablecoin. By depositing the asset, we will issue a stablecoin (lets call it StableA) that is over-collateralized and backed by our treasury (and the magic is: the asset will automatically save into the Lending protocol and get interest when is deposited as collateral). Using the classic arbitrage mechanism the StableA will always soft peg with the value of USD, a safety insurance vault will be introduced to maintain the stability when the black-swan events happen.

3) Liquidity as a service protocol. By implementing the classic veCRV model, we are creating the next generation liquidity layer in Aurora. Anyone can vote where the liquidity should go by locking our governance token (the longer you lock, the more voting power you have), and the protocol will rank the votes and distribute token incentives to attract liquidity. Interestingly, half of the liquidity going out will be StableA.

Liquidifi aims to create a fundamental liquidity layer that all the protocols can join and get additional liquidity.

Advantage

1) We choose the aurora chain to startup our project, which could be the key components in the aurora ecosystem

2) In terms of stablecoin sector: we combine the lending protocol with the Over-collateralized stablecoin protocol, which generate interesting advantage : 1. strong asset reserve that assure the stability of the stablecoin, 2. less fee when leveraging the position, 3. collateral will automatically collect interest

3) In terms of liquidity voting sector: different from tokemak, half of our liquidity will be the protocol stablecoin, and the other half will be different stables. we want to focus on the stablecoin liquidity directing first. Advantage: 1. users can easily leverage their position, 2. stableA will be the universal liquidity booster for all the protocol , 3. user friendly veToken design, which can be traded + bribed

How we built it

Liquidifi is combing lending and stablecoin protocol into one product, and introduce liquidity directing features to build up the liquidity layer in aurora. we took reference of Compound and Abradacadebara. And combine Aurora's development tools with other defi infrastructure to build the most user friendly protocol

Challenges we ran into

Right now there is limited infrastructure to use in Aurora, such as oracle and data service, we are trying our best to implement as much as possible to make the product better on the other hand, security is also a key part in defi protocol, we put huge effort on the codes which is related with security

Accomplishments that we're proud of

The innovative liquidity directing service that we will introduce into the aurora ecosystem will have big impact on all the defi protocols in aurora. And we are proud to take this initiative to build the next generation liquidity as a service protocol