The types of Lending Pool
Understanding Lending Pools and Guide to Building a DeFi Lending Platform
Overview
In this series of articles, we will dive deep into understanding and building a decentralized lending platform (DeFi Lending Platform). Before we start coding, we need to understand the basic concepts of Lending Pools and how they work.
What is a Lending Pool?
A Lending Pool is a liquidity pool where users can deposit tokens for lending, and others can borrow these tokens. This is the foundation of DeFi lending applications like Aave, Compound.
Common Types of Lending Pools
1. Main Pool - Basic Pool
This is the most common type of pool in DeFi, with these characteristics:
- Users can deposit multiple types of tokens
- Uses an overcollateralized lending model
- Interest rates are automatically calculated based on supply and demand
- Collateral ratio typically ranges from 50-75% for security
2. Isolated Pool - Independent Pool
This type of pool is designed to minimize risk:
- Each pool supports only a specific token pair
- Risks are isolated, not affecting other pools
- Suitable for new tokens or high-risk assets
- Parameters like collateral ratio and interest rates can be customized
3. Leverage Pool
This pool is designed for professional traders:
- Allows high leverage borrowing (up to 10x)
- Direct integration with DEX
- Has automatic liquidation mechanisms to protect the pool
- Suitable for complex trading strategies
Important Considerations When Designing Lending Pools
| Factor | Main Pool | Isolated Pool | Leverage Pool | | --- | --- | --- | --- | | Risk Level | Medium | Low | High | | Collateral Ratio | 50-75% | Customizable | 10-50% | | Complexity | Low | Medium | High |
In the following articles, we will delve into implementing each type of pool, starting with the Main Pool - the most basic type. We will learn how to design smart contracts, handle interest rate calculations, and implement necessary security mechanisms.