> For the complete documentation index, see [llms.txt](https://docs.tydro.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tydro.com/ii.-core-concepts/markets/isolated-markets.md). # Isolated Markets ## Isolated Markets An isolated market pairs one collateral asset with one borrowable asset and contains risk to that market. This page describes how isolated markets work and documents Tydro's launch market. ### How isolation works In an isolated market, the posted collateral backs borrowing of a single loan asset, and risk does not cross into other markets. If the collateral asset comes under stress, the effect stays within that market rather than spreading across the protocol. Each market keeps its own parameters and oracle configuration. A new asset can be listed in its own market without changing the risk profile of existing markets. ### Initial market: kBTC / USDC At launch, Tydro operates one isolated market. kBTC is posted as collateral and USDC is borrowed against it. * **Collateral:** kBTC, Kraken Wrapped Bitcoin, issued by Kraken and backed 1:1 by BTC held in Kraken's segregated custody. Contract address `0x73E0C0d45E048D25Fc26Fa3159b0aA04BfA4Db98` (8 decimals). * **Loan asset:** USDC. Contract address `0x2d270e6886d130d724215a266106e6832161eaed`. * **Interest rate model:** fixed borrow rate, set through a flat model and held by governance. The borrow rate does not climb with utilization and there is no kink. See [Interest Rates](/ii.-core-concepts/interest-rates.md). * **Term:** open-ended. The loan has no maturity date, so the position can be repaid or exited at any time. * **Oracle:** Chainlink BTC/USD and USDC/USD feeds, routed through the TydroOracle contract. See the [Oracles](/vii.-developers/developer-overview/smart-contracts/oracles.md) reference for addresses. A fixed borrow rate paired with an open-ended term is what sets this market apart from a standard variable pool. The cost is set up front and held for as long as the position is open. ### Parameters On-chain values are authoritative. See the [Markets](/ii.-core-concepts/markets.md) reference for live parameters and addresses. ### Borrowing in this market 1. Post kBTC as collateral. 2. Borrow USDC up to the market LTV, at the fixed borrow rate. 3. Monitor the position's health factor. See [Using Tydro](/iii.-using-tydro/before-you-start.md). 4. Repay USDC and withdraw kBTC to close the position, on any schedule. > **Warning:** This market borrows USDC against kBTC. A fall in the kBTC price relative to USDC lowers the position's health factor and can lead to liquidation. See [Liquidation Risk](/v.-risk/risk-types-and-overview/liquidation-risk.md). --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.tydro.com/ii.-core-concepts/markets/isolated-markets.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.