Decentralized finance service B.Protocol has announced plans for a new version that will improve the liquidation of undercollateralized loan positions on lending platforms.he backstop liquidity protocol for DeFi lending platforms revealed that the upcoming v2 is based on a white paper for a novel Backstop automated market maker (B.AMM) written by a couple of anonymous community members.
Unlike centralized exchanges like Binance that offer leveraged trading up to 100 times user deposits, the leverage ratio on decentralized exchanges (DEX) rarely exceeds five times. This significantly lower leverage limit is despite the massive liquidity pool available to DEX platforms.DeFi lending platforms like Maker utilize a system of market-maker-keeper (or keepers) responsible for, among other functions, executing liquidations. These keepers have been the focus of scrutiny during black swan events like Black Thursday back in March 2020.According to Velner and the B.AMM white paper, the rebalancing process will be based on the Curve Finance stable swap invariant for asset pricing. While the stable swap invariant is designed for correlated asset pairs like Dai (DAI) and Tether (USDT), B.Protocol v2 will expand it for uncorrelated pairs like DAI and Ether (ETH).
“The system is designed specifically for non-correlated assets. This is possible because the system relies on an external price feed (e.g., Chainlink). The Curve Finance's stable swap invariant is only used to determine the discount in the rebalance process.”
source :https://cointelegraph.com/news/b-protocol-announces-v2-platform-for-defi-liquidations
