SushiSwap recently announced the launch of “Kashi” a platform for lending and margin trading on BentoBox. This platform empowers the exchange to offer larger net margin assets than what independent DeFi lending platforms offer.
Kashi is a platform that will allow traders to create leveraged long & short positions just like what traders can do in AAVE or Compound. Also, BentoBox will make it easy for users of Kashi to get interests by contributing to liquidity pools and also invest the same interest in lending pools.
SushSwap Backed Kashi To Operate Uniquely
There are numerous lending platforms in the crypto community, but Kashi comes with new operational patterns. According to Joseph Delong, SushiSwap Powered Kashi will be different from other DeFi lending protocols.
It’ll feature more assets for its users to borrow. The platform enables this by separating the risks between individual lending pairs. This means that if one asset’s value falls, other assets’ positions will not be affected.
This is different from what happens on other DeFi lending platforms. On these other platforms, users who make asset deposits can use the same as collateral if they want to borrow assets on the platform. For instance, if a user deposits ETH in a vault containing WBTC, he/she can only borrow WBTC and none other.
According to Delong, other lending protocols are not willing to add both collaterals & borrow tokens to the platforms. The reason being that they don’t allow the spreading of risks across all the assets in the pool. However, Delong said that Kashi said is an “isolated lending pair market”. It isolates risks to particular pools so that a failed pool will not affect the others.
Joseph Delong Regards Kashi as AMM Platform
According to Delong, Kashi may be an automated market maker moment for lending, enabling users to define markets individually as they deem necessary. With such a capacity, users can increase capital efficiency in the lending market.
Moreover, with the “isolated risk” profile, the platform can feature more assets that have higher risks than what other platforms have. That way, it’ll allow the shortening of many crypto assets. By enabling short, market efficiency will increase significantly, and traders can easily have a say on asset prices and facilitate derivatives like options and futures.
The new platform also allows flash loan operations. Flash loans are fast loans that are collected and repaid very fast in one block. According to the SushiSwap, Kashi V1 has pre-built lending pools, but when Version 2 launches, anyone can now create the pairs they want.
As for those who don’t trade, they can utilize the platform to obtain yield on the assets they have through BentoBox. This vault will be the wallet for the new lending platform. Users can also combine their yield sources. They can get the fees from traders, get rewards from Onsen liquidity mining, and get interests from Kashi users.
More About Kashi and BentoBox
Developers have been working on both Kashi and BentoBox for some time now. The first announcement about the duo was in September 2020 after SushiSwap joined the industry.
We learned on GitHub that PeckShield and Quantstamp audited Kashi earlier, although not in-depth. However, the SushiSwap team took it up to create their checklist, which they tried to cover at least 100%. Apart from these, Certora carried out some mathematical verifications on the contracts as well.
Moreover, a core SuchiSwap team member known as “0xMaki” excitedly declared that they’d be rolling out new features very soon for the users.
According to him, they’ve just released Version 1 of the long-awaited product. But with time, they’ll be releasing lots of great features. He also mentioned that the team working on the project is passionate and that they had to place Certora on retainer to cover their SC needs.
This new entrant is one of the first implementations of the 2021 road map drawn by SushiSwap. This platform will diversify SushiSwap to operate more than an AMM platform.