A protocol built on top of Aave v2 that establishes markets for the exchange of risk, based on pooled collateralization. There is no in-protocol algorithmic underwriting, instead borrowers (sellers) deposit collateral to borrow an asset from a risk pool, which allows them to decrease their realized risk from some position in exchange for a portion of their realized profits. Suppliers (buyers) receive Aave's base APY plus shared profits and losses from sellers. The frontend currently resembles depositing and borrowing on Aave.

How it's made

The protocol is a Solidity contract currently deployed on a local forked mainnet chain from Alchemy on a recent block number. It gets its base yields from Aave supply and its liquidity from Aave borrow. It uses Uniswap for its collateral/token swaps without flash loans. It was tricky to develop the protocol cover and profit-sharing rates mostly from scratch. However, seeing it go from an idea to math to integrating everything from Hardhat to the various dependent protocols and technologies of the web3 stack was rewarding.

Technologies used