Technical Overview

Avon has two layers that works together to provide most competitive onchain loans:

Strategy Layer

• It is composed of multiple ERC-4626 compliant lending markets.

• Enables strategy (pool) creators to deploy customizable markets.

• Strategy managers can pick interest rate models, price oracle, liquidation mechanism and risk parameters like LTV ratio.

Matching Layer

• Executes the actual matching of orders, ensuring that all parameters are met.

• Prioritizes interest rates, followed by loan-to-value (LTV) ratios.

• Facilitates market, conditional and limit borrow order by routing to most competitive strategies.

Key Participants

• Strategy Managers – Deploy and manage strategies (lending markets). Configure key parameters like interest rate models, LTV ratios, and liquidation mechanisms.

• Lenders – Provide liquidity to markets. Earn yield by participating in strategies chosen and managed by Strategy Managers.

• Borrowers – Interact with the onchain order book to take out loans. Can submit market, conditional, or limit borrow orders at floating rates.

How Matching Works

The protocol matches orders based on several key parameters:

• Interest Rate

• Loan & Collateral Asset

• Acceptable LTV Ratios

• Available Liquidity

All of this happens onchain in a transparent, efficient manner, optimizing for both capital efficiency and user experience.