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.
• 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 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 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.
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.