Stormbit Finance
  • Introducing Stormbit
    • What is Stormbit ?
    • Why Lend on Stormbit ?
    • Why Borrow on Stormbit ?
    • No Liquidations
    • Capital Buffers - Adaptive Risk Management
    • Security at Core
      • Trust distribution and verification
      • zkSTARKs to scale Bitcoin (coming soon)
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  1. Introducing Stormbit

No Liquidations

In agreement-based lending, the absence of liquidations means loans aren't forcibly closed when collateral value fluctuates.

There are two types of lending :

  1. Algorithmic lending : Protocols like Aave, Compound, and Morpho operate with automated liquidation mechanisms built into their design. These protocols continuously monitor collateral values and automatically trigger liquidations when predetermined thresholds are reached.

  2. Agreement-based lending : Protocols such as Rain.Fi, Teller, and Stormbit function through fixed terms and duration conditions. In this model, lenders can only claim collateral after the loan period ends. These protocols are price-agnostic, operating independently of real-time price fluctuations.

Stormbit's vision enables the use of any Real-World Asset (RWA) as collateral, including illiquid assets. This necessitates an agreement-based lending approach because:

  • Illiquid RWAs cannot be priced continuously

  • Case-by-case evaluation replaces algorithmic pricing

  • Composable, modular lending agreements accommodate unique asset characteristics.

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Last updated 1 month ago