FAQ
Q.1 What problem is Asgard solving?
Asgard is solving the problem of unlocking undercollateralized credit in DeFi. We're doing this by implementing a prime brokerage model on-chain through
Credit Accounts - a smart contract account with custom validation and execution logic that enables undercollateralized interactions with DeFi protocols.
Hyperoptimized borrow/lend protocol for Credit Accounts - where Lenders can park their assets to earn high passive yields from Borrowers who are using the Credit Account to draw undercollateralized credit line.
Q.2 Can you help me understand the market demand that Asgard serves?
Market demand for a product like Asgard comes from Borrowers who take out undercollateralized loans to increase capital efficiency.
One other way to see it Borrowers who open up margin accounts to execute spot margin trades.
There are different user persona of Borrowers that Asgard will likely serve over time:
Here profile of borrower = margin trader
Trader get's more trading pairs: 200+ pairs supported (current perp DEX's only support 40+) including pair trades (SOL/ETH, SOL/BTC)
With deepest liquidity:
trade on $2B DEX liquidity that will almost always scale faster than isolated liquidity coming inside perp DEX's (Drift/Zeta) and LP backed pool leverage (Jup/Flash Trade).
Open large trades with the confidence that you will get min slippage. No scam wicks because you are basically trading in the deepest liquidity.
With cheaper fees:
Research and our internal realtime on-chain analysis dashboard has proven that margin trading via money markets is cheaper (1.5x to 3x) and less volatile (20x).
That is why you see the most dominant volume creating trades/strategies that people execute on AAVE, Morpho, Kamino is to take spot leverage, we just make it super efficient to do more of it with proper risk management tooling.
Here profile of borrower = smart LP on AMMs
These LP's can use Asgard Credit Accounts to put more capital inside LP pools.
Eg: instead of puting $10k in SOL-USDC CLMM pool, put $100k to earn higher LP fees.
This makes the LP pools on DEX's more capital efficient.
Market for it:
Solana DEX volume is ~$40B monthly currently. Assuming an avg of 0.2% paid to LP's, LP's are earning ~$80M/month.
Now a smart LP can get more capital to LP -> injecting more liquidity into the AMM/CLMM pools -> to get more share of the LP pool.
Here profile of borrower = yield farmer
Farm interest rate differentials with more credit.
For eg:
LST (all sanctum LST's) staking yield - SOL borrow yield,
LRT's yield - SOL borrow yield,
USDC lending yield - pyUSD borrow yield
Market for this: Farmers have deployed ~$600M on Kamino right now to farm yields. Now imagine you can get more credit to farm these yields + more strategies to farm yields on.
Here profile of borrower: LP of JLP pool ($618M) and FLP pool ($10M) who likes yields but do not like volatility
Wants to be exposed to high yields of these pools, but do not want to be directionally exposed to the market.
We can spin up Deltra Neutral Vaults using Asgard infra that longs JLP and short SOL/BTC/ETH to convert JLP yields into stablecoin yields.
Here profile of borrower = capital efficiency maximizer
Farm points/token incentives on upcoming narratives (LST's, LRT's, points, upcoming airdrops)
You can even buy a floor Madlad on credit to get access to it's airdrops.
Setup token indexes: open a Credit Account with $10k, borrow $90k -> now you have $100k -> split it equally between SOL/WBTC/WETH
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