Overview
Components
The basic components for understanding Orbit's functions are as follows:
| Component | Description |
|---|---|
Interactions and computations for lending assets to Orbit | |
Interactions and computations for borrowing assets from Orbit | |
Mechanisms to forward future Blast native yield value to the present | |
Mechanisms for redistributing value from native yield as subsidies to lenders and borrowers | |
Oracle for retrieving collateral price data | |
Mechanisms for the Orbit token - a medium for bringing future Blast yield to the present |
Protocol Actors
Actors in Orbit can be classified into four types: lenders, borrowers, liquidators, and oracle feeders.
Lenders in Orbit as incentivized to lend out Blast assets to the Orbit money market, from which borrowers borrow them out via collateralized loans. Interest on borrowed assets are paid from borrowers, which are then pro-rata distributed to lenders (Blast native yield is handled differently). The protocol also prevents borrowers from forming liabilities in excess of collateral value by incentivizing liquidators to constantly monitor and liquidate loans at risk of undercollateralization.
Lenders
A lender is a user that provides supported Blast assets to the Orbit money market. Provided Blast assets are pooled by asset and lent to borrowers, with accrued borrow interest distributed pro-rata to all depositors of the pool.
Lenders are required to specify their duration of lend when providing assets, being forbidden to withdraw their assets prior to their lending duration's expiry. Asset lends for a longer duration are compensated with an amplified distribution of Orbit token incentives.
Lenders are minted new Orbit assets (oAssets) in return for their provided assets. oAssets represent a lender's share in the asset pool and can later (after the preset lending period) be redeemed to retrieve the initial prinicipal, along with accrued interest from borrowers.
The protocol also distributes Orbit tokens, whose value carries the value of future Blast native yield, as subsidies to lenders.
Borrowers
Borrowers are users that post Blast assets as collateral to borrow other Blast assets from Orbit money market. Any Blast asset that is supported as collateral in Orbit can be provided to create a loan position. Loan positions are required to maintain a loan-to-value (LTV) ratio below the set maximum.
Through borrows, users can gain access to additional liquidity without losing price exposure to their collateral assets. Borrowers are recommended to closely monitor their loan position's LTV ratio, as loans with LTV ratios above the set maximum are subject to liquidation.
Just like lenders, the protocol also distributes Orbit tokens - whose value carries the value of future Blast native yield - as subsidies to borrowers.
Liquidators
Liquidators are actors that observe for the existence of loans in risk of undercollateralization - or loans with an LTV ratio above the maximum value set by the protocol - and requests loan collaterals to the liquidated (to be used for loan repayment) if necessary.
During liquidations, liquidators must also provide assets that can repay the liquidating borrower's loan. Liquidators are incentivized to participate as they receive liquidated collateral assets at a discounted price.
Oracle Feeders
Oracle feeders are external data providers that are responsible for providing an accurate and up-to-date price feed for collateral assets. Fed-in price data is used to calculate the collateral value of a bororwer, also used as the reference price during collateral liquidations.
Orbit's oracle feeder is initially set to be Pyth.
Last updated