dAMM, transparent institutional loan for any token. Discover the main characteristics of this ecosystem.
dAMM is an uncollateralized lending platform for any token with algorithmically determined interest rates. Any token with a liquidity pool on this platform, market makers and investors can borrow on this ecosystem to provide liquidity and trade across all centralized and decentralized trading venues.
Token suppliers and market makers interact directly with the dAMM protocol to both supply and borrow token liquidity without exorbitant fees, strenuous onboarding procedures and bilateral deal negotiation. Liquidity pools are unique to each token asset and entirely transparent/publicly accessible via their respective blockchains.
dAMM is the first institutional capital markets platform with an emphasis on all tokens. Lending is as simple as finding your pool and pressing “Deposit.”
Tokens are aggregated within liquidity pools and subsequently lent to other users/borrowers. Once tokens are deposited to the platform, token suppliers are provided with liquidity tokens proportional to their deposit.
These liquidity tokens can be burned at any time for the underlying asset. As interest denominated in the pooled assets accrues to the token suppliers, their liquidity pool (LP) tokens can be redeemed for an increasing quantity of the native token deposited and bdAMM.
Interest rates for token suppliers are determined by the algorithmic interest rate pricing curve, alongside natural supply and demand forces of the pooled asset.
On dAMM, token borrowers are able to access capital for use anywhere in the crypto-asset ecosystem. Market makers have direct access to pools of capital for their trading operations and can frictionlessly borrow and trade pool assets. Borrowing interest rates are algorithmically determined as a result of the utilization rate of the pool’s assets.
There are limitations set for each borrower based on their creditworthiness and staked dAMM. Borrowers must enter into a Master Loan Agreement with the dAMM Foundation during the onboarding process, which allows legal enforceability of the terms and conditions under which the borrower can access and obtain loans from dAMM Pools.
A seven day grace period is allowed for interest payments due on the first day of each calendar month. If interest on outstanding loans is not paid back within the grace period, collateral on the protocol is liquidated by the dAMM Foundation.
Borrowers on the protocol as well are incentivized to report volumes and +2%/-2% depths on exchanges they are trading on for dAMM token incentives. By incentivizing real time data analytics from borrowers, additional transparency is provided to depositors.