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Users must supply eligible tokens and collateral (denoted, "Eligible Collateral) to Infinity before you initiate a lend or borrow position. All eligible collateral supplied to Infinity is locked in a smart contract which is public, open source, formally verified and audited by independent third party auditors.
- You can’t withdraw ‘lent’ funds on-demand (as with Aave/Compound), but are subject to market forces, e.g. liquidity from the ‘other side’, in order to withdraw lent funds.
- You can’t (yet) export a tokenised version of your lending position (for example, the aToken or cToken equivalent on Aave and Compound, respectively), however you can use lending positions as collateral within Infinity.
Once your wallet is connected with Infinity, collateral is transferred to Infinity’s Smart Contract over a two step process, from Wallet to Current Account, then from Current Account to Trading Account.
Note: Diagram from our V1 protocol. We have not yet unlocked multiple, isolated, Trading Accounts but will do so in due course.
All tokens transferred to/from the Infinity Protocol must go in/out of your Current Account, and then to/from your Trading Account. This is used for security purposes (e.g. to prevent flash loans, and other malicious attacks), and to enable broader flexibility, and seamless connectivity within the trading ecosystem.
Any collateral in your Current Account would not be applied towards your Trading Account's balance, and would also not be subject to any liquidation.
Note: only Eligible Collateral may be transferred to Infinity’s smart contract, with its balance reflected in your Current Account. If you transfer tokens other than those whitelisted, they may be returned/rejected by the smart contract.
All tokens in the Trading Account are used to initiate and maintain lending and/or borrowing positions. All Eligible Collateral held in the Trading Account is considered an Asset (or 'Long' lending position), which can be used as collateral against any Liability (or 'Short' borrowing position). All assets within the Trading Account are subject to liquidation in the event that the maintenance margin is not met.