Orbit Protocol
Last updated
Last updated
Orbit is a decentralized liquidity protocol that facilitates the lending and borrowing of Blast assets. Orbit's innovation is to make use of Blast's native yield to provide a better lending / borrowing experience. The protocol is expected to generate yields that are more competitive to existing lending protocols.
The protocol defines a money market between lenders, wishing to earn additional yield on their asset holdings, and borrowers, looking to borrow assets with the use of other assets as collateral. Lenders supply supported Blast assets for a predetermined lending period in return for Orbit Assets (oAssets), which represent the lender's initial principal as well as accrued yield.
Upon expiry of the predetermined lending period, oAssets can be redeemed for principal + accrued yield - this simplifies yield collection to be done just by holding on to them. Users can also borrow assets by providing supported Blast assets as collateral and borrowing at under the protocol-defined loan-to-value ratio.
Native yield from lender assets and provided collaterals first accumulate to the Orbit token, acting as the medium to forward future Blast yield value to the present. Orbit tokens are then distributed to both lenders and borrowers, used to subsidize the yield.
Blast is an EVM-compatible, optimistic Ethereum L2 that provides native yield for ETH and stablecoins. Blast's native yield is sourced from ETH staking and RWA protocols, passing over the yield to Blast users automatically. Contrary the 0% default yield on other L2s, Blast offers 4% for ETH and 5% for stablecoins.
Blast is designed from the ground up to provide an elevated baseline yield for users and developers without the need to change the experience that crypto-natives expect. Its native yield makes it possible to formulate new business models for dApps that are simply not possible on other L2s.
Notable features of Blast include:
Auto Rebasing: ETH on Blast is natively rebasing both for EOAs and smart contracts (optional).
L1 Staking: ETH yield from Lido is automatically transferred to users via rebasing ETH on the L2.
T-Bill Yield: USDB, Blast’s auto-rebasing stablecoin, accrues yield from MakerDAO's T-Bill protocol.
Gas Revenue Sharing: dApps on Blast are programatically distributed the net gas revenue of Blast.
Orbit's lending system operates entirely within a code-based environment, removing the need for traditional intermediaries. With automated adjustments to borrowing and lending rates based on factors like capital utilization rates, creating consistent and reliable service. For instance, when capital utilization rates rise, interest rates increase, incentivizing borrowers to repay loans promptly. This approach guarantees sustained liquidity levels, providing users with a safer and more dependable experience.
In addition, Orbit utilizes the native yield of ETH and USDB assets provided from Blast to generate indirect subsidies to lenders and borrowers. The subsidies are used to provide additional boost to lender yield and to create discounts for borrower interest.
