FAQs

1. Is Avon a fixed-rate lending protocol because it has an order book?

No. Rates in Avon are always floating. The order book only shows the liquidity levels that each strategy publishes. When a borrower taps a level, they step into that strategy’s floating curve at that point. After execution, the rate continues to evolve with utilization inside that strategy.

The order book coordinates access. It never locks the rate.

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2. What exactly is a “strategy”?

A strategy is an isolated lending market with its own interest curve, LTV rules, and liquidation model. It behaves independently from other strategies. Borrowers may end up with exposure across several strategies, but each part of the position follows the rules of the strategy that supplied it.

Strategies define credit. The order book only surfaces them.

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3. Why would I borrow through Avon instead of other protocols?

Avon gives you the depth of pooled systems without forcing you into a single risk model. You see all available liquidity in one place. You get the best terms automatically, even if liquidity comes from multiple strategies.

You do not need to search across markets, and you do not inherit pooled risk.

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4. Why would a lender choose Avon?

A lender in Avon chooses exactly the risk they want. Liquidity never leaves the strategy they deposit into. There is no allocator or vault manager redistributing funds to other markets. Yield comes only from the borrowers inside that one strategy.

This gives lenders full control and clear boundaries.

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5. If strategies are isolated, how does the market look unified to borrowers?

Strategies publish their liquidity levels to the order book. The order book displays all strategies at once, sorted by price and constraints. Borrowers interact with this single surface. Under the hood, the protocol records multiple independent components.

This creates unified access without pooled risk.

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6. Can I get liquidated in one strategy but remain fine in another?

Yes. Health is checked per strategy, not across the entire position. If collateral falls, one component may be liquidated while others remain healthy. This behavior is intentional and protects lenders in markets unrelated to the one that becomes unhealthy.

Borrowers should track their components individually.

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7. Does Avon rebalance or move liquidity between strategies?

No. Liquidity never moves unless the lender withdraws or redeposits. There are no allocators, no vault managers, and no automated rebalancers. Strategies are like separate markets connected only through the order book’s visibility layer.

You always know where your funds are.

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8. Avon says there is no allocator. Then what is MegaVault?

Avon strategies never rebalance your funds. Liquidity stays in the strategy you chose unless you withdraw or redeposit.

MegaVault is a separate, opt-in USDm vault product that can allocate across multiple venues. Depositing into MegaVault is how you choose that behavior.

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9. How do rates move after I borrow?

Your rate moves according to the utilization of the strategy you entered. If liquidity inside that strategy gets borrowed, the rate increases. If borrowers repay, the rate falls. Each strategy’s curve defines this movement.

Nothing global affects your rate except the conditions of the strategy you borrowed from.

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10. What makes a strategy “good” or “bad”?

Good strategies offer stable collateral, predictable curves, reasonable LTV, and liquidation rules that match market volatility. Bad strategies may use volatile collateral or offer LTVs that are too high. The benefit of Avon is that bad strategies do not affect good ones.

Borrowers naturally route into competitive strategies. Poorly designed ones lose flow.

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11. How does Avon prevent the fragmentation that isolated markets normally cause?

Fragmentation happens when borrowers must manually search through many pools. Avon removes that friction by letting strategies publish their terms to a shared order book. Borrowers never choose pools. They borrow from the combined surface.

Execution splits internally, but the experience stays unified.

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12. Why does Avon work only on high-throughput chains?

The order book needs to stay in sync with strategy state. When a borrower takes liquidity, utilization changes and the strategy updates its levels. On a slow chain, the order book would be stale. On a fast chain, it stays almost perfectly aligned with real conditions.

MegaETH makes this architecture possible.

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13. Is Avon permissionless? Can anyone deploy a strategy?

Yes. Anyone can deploy a strategy with a custom curve and rules. The system does not judge whether a strategy is good or bad. Borrowers and lenders do. Strategies compete on the order book, and markets gravitate toward the best designs.

Permissionless creation does not compromise isolation.

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14. How safe is it compared to pooled lending?

In pooled systems, one bad asset or parameter can contaminate the entire pool. In Avon, each strategy is isolated. A mistake in one does not affect others. Risk stays local. Borrowers and lenders see that risk clearly before interacting.

This reduces systemic exposure significantly.

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15. What happens if I borrow a large amount? Will the system split it?

Yes, if needed. The order book will source the size from multiple strategies if no single strategy can satisfy your request. You get one transaction. The protocol tracks multiple components underneath. Splitting is automatic and transparent.

This is how Avon gives borrowers depth without pooled liquidity.

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16. Can strategies be upgraded or changed?

Strategies cannot change their core structure. Interest curve shape is immutable. Only certain parameters can change, and all such changes require a timelock. Borrowers never face surprise curve shifts, and lenders know the design stays intact.

Predictability is a core design principle.