Why Lend on Stormbit ?
Term-Based Risk Management
Each lender functions as a Term Manager, defining their own lending terms:
Selection of which tokens to accept as collateral
Custom Loan-to-Value (LTV) ratios, APY, and loan duration
Ability to add zkTLS-based borrower requirements (e.g., credit scores, transaction proofs, invoices)
By setting these parameters upfront, lenders control risk exposure rather than relying on protocol-wide liquidation mechanisms.
Protection Against Volatility
No Oracles, No Forced Liquidations
Stormbit removes price-based liquidation triggers entirely, avoiding oracle manipulation risks and liquidation cascades common in traditional DeFi lending. Lenders define their own risk exposure before issuing a loan, ensuring they are not dependent on automated liquidation mechanisms that may fail during market shocks.
LTV Ceilings on Volatile Assets
The protocol enforces maximum LTV limits for highly volatile tokens (e.g., 20–30% LTV cap). This prevents borrowers from extracting excessive value against rapidly fluctuating assets, ensuring lenders are not overexposed to sudden devaluations.
Off-Chain Monitoring and Manual Collateral Management
LTVs are monitored off-chain. The protocol can recalibrate risk exposure over time rather than being locked into rigid liquidation structures.
Mitigating the Risk of Worthless Collateral
The concern of borrowers walking away from devalued collateral is directly addressed through loan structuring:
Predefined LTV Limits: By capping LTV at a conservative ratio (especially for volatile assets), lenders ensure they always maintain a buffer against potential price drops.
Loan Duration Control: Lenders set fixed-term durations, ensuring that collateral risk exposure is only for a predefined period and not indefinite.
Why This Approach Works
Stormbit does not rely on protocol-level liquidation mechanics that assume constant market efficiency. Instead, it transfers risk management directly to the lender, ensuring that only those comfortable with specific asset volatility engage in such loans.
Stormbit provides a framework for lender-defined risk, allowing institutional lenders, DAOs, and high-net-worth individuals to structure loans based on their own models, rather than relying on one-size-fits-all liquidation logic that fails in extreme conditions.
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