Protocol Overview and Design
The page outlines how the protocol is designed to function
Mooncake Finance is built on the solid foundation of Aave Protocol V3, allowing it to inherit the proven efficiency and reliability of Aave's decentralized lending and borrowing platform.
However, Mooncake Finance aims to go beyond this foundation and introduce innovative features tailored specifically for the Linea ecosystem.
- Capital Efficiency and Asset Utilization: Mooncake Finance prioritizes capital efficiency, enabling users to optimize their asset utilization for maximum yield generation and borrowing power. By strategically utilizing assets, users can enhance their returns and borrowing capabilities within the protocol.
- Efficiency Mode (eMode) and Cross-Chain Interactions: Efficiency Mode (eMode) is a novel feature introduced by Mooncake Finance, allowing users to extract the highest borrowing power from their collateral when supplied and borrowed assets are correlated in price. This opens up possibilities for cross-chain interactions, facilitating seamless movement of assets between different blockchain networks.
- Isolation Mode and Siloed Borrowing: In Mooncake Finance, assets can be listed as isolated, restricting their use as collateral to specific borrowable stablecoins. This Isolation Mode mitigates risks associated with certain assets and enhances the protocol's overall solvency. Siloed Borrowing further contributes to risk management by allowing assets with potentially manipulatable oracles to be listed as single borrow assets.
- Decentralization and Governance: Mooncake Finance's governance model aligns with the principles of Aave, empowering token holders with voting rights to influence protocol improvements. Decisions regarding risk parameters and protocol updates are made collectively by the community, ensuring a decentralized and community-driven approach to governance.