As per Savvy DeFi, it removes the risk of liquidation by enabling borrowers to repay their debt 1:1 with their original collateral or the Savvy synthetic tokens.
Savvy DeFi Aims to Become Omnichain
Savvy DeFi announced its plan to launch on Arbitrum with the goal of becoming omnichain.
Using Savvy, the protocol claims that users can get their future yield today using non-liquidating, auto-repaying loans and Arbitrum yield strategies.
As reported, Savvy removes the risk of liquidation using a repayment model. Borrowers can repay the debt 1:1 with their original collateral or synthetic tokens provided by Savvy.
The protocol is built around the SVY Utility token. SVY will have a maximum supply of 10,000,000 SVY and will be distributed over six years. You must possess SVY to utilize Savvy’s smart contracts and access non-liquidating lines of credit. Additionally, token staking can be enabled through a VE model.
Further, the Savvy DAO will play a prominent role in encouraging community participation and ensuring ecosystem health.
Working of Savvy DeFi:
The Savvy Vault allows users to deposit collateral (such as USDC, USDT, DAI, ETH, and BTC) before selecting a yield-bearing strategy. In addition, a borrower may mint a svToken line of credit up to 50% of their collateral value.
After that, the collateral is used to generate yield, which is applied to the loan’s balance over time, effectively paying off the loan. Borrowers also have the option of leaving their deposit in a yield strategy, enabling them to draw down their line of credit at a later time.
As an alternative, depositors can repay their debt early with either the base token or svToken, allowing borrowers to withdraw collateral. Furthermore, borrowers can self-liquidate their lines by using part of their collateral to repay the debt and then remove the balance.
Worth noting the Arbitrum ecosystem has grown rapidly since its inception. According to Savvy, it chose Arbitrum because of its user base, performance, community, and vibrant DeFi ecosystem.
The layer-2 network also reached a milestone on April 21 by crossing 200 million transactions. At press time, Arbitrum’s TVL stands at $2.16 billion, with GMX protocol dominating 29% of it. Arbitrum ($ARB) is trading at 1.48, up 4.43% in 24 hours.
What is Savvy DeFi:
Savvy is a DeFi protocol that was first deployed on Arbitrum (then Avalanche, then Omnichain) and allows users to take a synthetic credit line against their cryptocurrency. Borrowers keep their choice collateral exposed while also gaining access to immediate liquidity. Savvy harvests and auto-compounds the generated yield, then applies it to their loan balance, resulting in interest-free, auto-repaying loans.
Learn more about Savvy DeFi: