Using Avon
Borrowing
To borrow on Avon, the user starts by submitting an order into the order book. The order specifies the asset they want, the amount, and the collateral they plan to supply. No collateral moves at this point.
The order book evaluates all available quotes from strategies that support that market and selects the best combination that satisfies the borrower’s constraints. Once a valid path is chosen, the protocol pulls the required collateral from the user and settles the borrow in a single transaction.
If the borrow is filled across several strategies, the system creates separate components internally, each following the rules of the strategy that supplied liquidity. The borrower sees one borrow action on the surface. Rates remain floating and evolve independently inside each strategy as utilization changes.
Managing Borrow Positions
Borrowers can manage their position by adding collateral, repaying part of the debt, or closing it entirely. The protocol presents an aggregated view but tracks each component separately.
When repaying, the system unwinds components in a consistent and deterministic order. Borrowers do not need to choose which strategy to repay first. The rules follow the structure of the position.
Transparency helps borrowers understand how their exposure evolves over time.
Providing Liquidity
Lenders deposit funds into strategies. Yield depends on utilization inside the strategy they chose. A lender who prefers conservative exposure can deposit into strategies with stricter LTVs and steeper curves. A lender seeking higher potential returns can choose more aggressive designs.
Withdrawals depend on available liquidity in that strategy. Strategies never move capital on behalf of lenders. There is no allocator and no cross-market rebalancing.
Lenders participate in exactly the risk they choose.
Understanding Risk as a User
Risk in Avon is simple to reason about. It is always tied to the strategy selected. Borrowers must understand LTV limits and liquidation rules for the strategies they touch. Lenders must understand the collateral types and curve structure.
The order book does not blend risk. It only displays it. Borrowers and lenders know that every part of their position corresponds to a known strategy with known rules.
This clarity is core to Avon’s design.
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