Fringe Finance’s V2 release introduces significant enhancements to its DeFi lending and trading platform.
This article describes how Fringe has implemented advanced mechanisms to achieve higher security, lower costs, and greater utility, combining a new price oracle model that reduces the risks of price manipulation attacks, a partial liquidation model that lowers costs for borrowers and traders while increasing stability for lenders, and the introduction of spot margin trading facilities to minimize price impact for margin traders.
If you are seeking a feature-rich, robust DeFi lending and margin trading platform that reduces costs and enhances security, read on.
Fringe Finance V2: Differentiators and Benefits
Fringe Finance V2 is introducing several security measures that set a new standard in risk management, placing security at the forefront for a safer and more stable DeFi experience.
Price Manipulation Protection
Fringe Finance’s new price oracle model is a key innovation, bringing several benefits to our DeFi lending platform. It enhances overall security and reliability, enabling support for listing a broader range of assets. Acting as a wrapper for popular price sources (such as Chainlink, Pyth, and Uniswap V3 price feeds), Fringe’s new price oracle model achieves these enhanced properties.
Price Attack Recovery Mechanism
Our new price oracle model includes a recovery system to detect and mitigate the effects of external market price manipulation attacks. It ensures stability and security against suspected market price attacks
Enhanced Protection Against Market Manipulation
The model increases resilience against market price manipulation attacks, providing users with more reliable and accurate pricing. This addresses vulnerabilities widely observed in DeFi, such as incidents like the Mango Markets attack, boosting user confidence in the platform’s robustness.
Borrowers’ collateral protection (Non-rehypothecating model)
Fringe Finance distinguishes itself in the DeFi sector with its innovative non-rehypothecation model, setting a new standard in risk management, lender and borrower security, and borrower rights. This model ensures that borrowers’ collateral is securely locked and not used for other purposes, contrasting sharply with prevalent rehypothecation practices in DeFi lending that pose risks like collateral shorting, governance rights misuse, inefficient liquidations, and insolvency of rehypothecating users.
While rehypothecation offers capital efficiency, it comes with heightened risks, especially in volatile markets. Fringe’s approach, offering greater security and collateral availability, appeals particularly in an environment where protocol exploits are common. By not engaging in rehypothecation, Fringe provides a safer, more stable alternative for DeFi lending, prioritizing lender and borrower security over the potential for higher yields, thereby representing a solid step towards a lower-risk, more reliable DeFi ecosystem.
We will soon release a full article describing the superiority of Fringe’s non-rehypothecation lending model.
Fringe Finance V2 is set to include several innovative enhancements that will redefine the standards in capital usage.
Improved Price Calculations for Liquidations
Borrowers benefit from a smoother price curve with fewer discontinuous price jumps by utilizing time-weighted average prices. This results in fairer liquidation prices for their collateral, minimizing the financial impact during liquidation events.
The increased amount of assets
The model’s efficiency and security enable Fringe Finance to integrate over 150 assets, including long-tail assets that are otherwise not well-supported in the DeFi lending and trading market.
Lower liquidation costs for borrowers
Fringe Finance’s new Partial Liquidations Model introduces several enhancements, aiming to improve borrower experiences, enhance platform stability, decrease borrowers’ liquidation costs, and foster broader adoption.
Unlike many platforms that enforce full liquidations, Fringe Finance’s model allows for only a part of the borrower’s position to be liquidated. This approach minimizes liquidation fees and market impact.
Proportional liquidator rewards
The reward percentage for liquidators varies inversely with the borrower’s position health. This design aims to allow the competitive liquidator market to outbid each other to perform liquidations, and thus minimize costs to borrowers.
Lower price impact for margin traders
A key defining benefit of Fringe’s leveraged trading facilities is the utilization of spot markets, providing access to liquid external markets. This is compared to some other synthetic or perpetual trading platforms that employ internal liquidity pools that may have limited liquidity and therefore result in high price impact for traders.
You can read more about our leveraged trading facilities here.
Borrowers and traders can repay loans using their collateral assets, eliminating the need to use borrowed assets. Read more here.
LP token collateral support
DEX liquidity providers will be allowed to use their Liquidity Pool tokens as collateral to take out loans. This opens a more efficient capital usage opportunity for a multi-billion market that is currently sitting dormant.
Better lender ROI through targeted utilization rate
Fringe has developed a unique interest rate model targeting a utilization rate. Interest rates will trend to a point that achieves optimal utilization of the lending pool. Rather than adopt the simplistic interest rate models often used by many other DeFi lending platforms that merely target an interest rate, Fringe’s model better assures lending pools are being lent out to borrowers rather than sitting idle, therefore optimizing lender returns. An added benefit of Fringe’s interest rate model is that interest rates will tend to avoid large changes in short periods, leading to more predictability for lenders and borrowers alike.
Read more here.
New utilities and features
The improvements delivered by Fringe V2 are not limited to protocol improvements for better protection and effective costs. Fringe V2 includes many new utilities to make lending, borrowing, and margin trading more of a joy for DeFi users. The V2 features include:
Includes Ethereum, Polygon, Arbitrum, Optimism and zkSync
Multiple lender assets
Additional available lending assets open the opportunity for the lenders to receive yield and for borrowers to borrow a wider range of assets.
Using The Graph decentralized indexing increases Fringe’s censorship resistance by fortificating the infrastructure that could potentially be the target of the attack.
Read more here.
Wrapped token gateway
The wrapped token gateway that supports auto wrapping/unwrapping of ETH to/from wETH increases convenience for the users.
Gas use optimizations
We have reworked our smart contract to be more gas-efficient and optimize the on-chain interactions.
Several UI improvements Include dynamic position health indicators, more informative UIs, and more pervasive tooltips. The platform interaction now is sleeker, more intuitive, and easier.
WalletConnect multi-sig wallet support
Fringe V2 will support a greater range of different wallets to better support diverse users including users with stringent security requirements. DAOs and institutional users can now interact with Fringe using multi-sig signing regimes via WalletConnect. See more here.
A wider set of secure price sources
Fringe is adding support for Uniswap V3 price feeds (with our new price oracle model) and Pyth price feeds, in addition to our current support for Chainlink price feeds. With the added protections of our new price oracle model, this will allow Fringe to securely list a greater range of assets from popular large-caps to more speculative long-tails.
Fringe has spent over a year improving upon our Fringe V1 core lending platform to deliver with Fringe V2 what we unequivocally consider a major improvement for the DeFi ecosystem. Fringe V2 is not just a copypasta of a generic lending protocol but a stride in innovation to help further realize DeFi’s anti-fragility. Fringe is continuing to strive to deliver a feature-rich, robust, and well-engineered lending and trading platform that reduces costs and increases protections for the widest range of users.
Fringe — DeFi for everyone.