Motivation
Security-focused Lending Markets
The LARI Finance team takes security seriously. We believe that the number of smart contract exploits that have occurred repeatedly completely unacceptable. Not only does it lead to the loss of funds for the thousands of users within the DeFi ecosystem, but it also greatly hinders the possibility of DeFi reaching mainstream adoption.
For this reason, we've chosen to build atop the Agoric SDK, as it allows us to develop smart contracts secured using object-capabilities (OCAPs). This differs from the approach of other smart contracting languages, namely Solidity and CosmWasm, in which Access-Control Lists (ACLs) are implemented for the save of prevent bad actors from acccessing smart contract interals, such as admin-level methods, which can result in an exploit occuring.
To learn more about this topic, we highly recommend checking out the following article from the Agoric blog:
Governance-minimized Lending
While projects like Aave have managed to amass billions of dollars in TVL, the issues with DAO-centered governance are apparent. One issue with this process is the length of time that it takes to get from start to finish in a governance proposal's lifecycle, which, on average, takes place over several weeks. Even if this process was expedited, it doesn't solve the core problems that underlies DAO-centered DeFi protocols.
In most instances, members of a DAO not well suited for making risk management decisions. Instead, these decisions should be made my individuals who have experience in modeling risk. That being said, it's no surprise that we're beginning to see platforms adopt the use of "committees" in which a group of individuals are elected for the purpose of making risk management decisions on behalf of the entire platform.
Another core issue related to the fact that risk management decisions are often-times time-sensitive. Modifications to a lending pool's risk parameters must be able to be implemented immediately, which is why we designed our protocol with this in mind. On LARI Finance, individuals who are tasked with managing a lending pool will be able to make whatever modifications they deem necessary in order to mitigate economic risk within their markets.
Interchain Lending Markets
LARI Finance leverages the IBC protocol in order to tap into liquidity flowing throughout the broader Cosmos ecosystem, and soon, ecosystems outside of the Cosmos. The wide array of networks, as well as all of the products and services that exist on them, creates significant demand for credibly neutral protocols like LARI, as users are able to create lending markets without being restricted by the assets in which they are able to create marets for.
In addition to creating demard, IBC best enables protocols like LARI to create markets with substantial network effects. After all, markets are about network effects, and IBC provides us with a core catalyst for growing these network effects as protocols exisiting on different blockchains are able to easily compose with one another.
Vision & Values
Throughout DeFi's inaugural years, there have been giants emerge within the sector of DeFi lending, most notable Aave and Compound. The success of these platforms can act as an indicator for how much value they provide to both the users, as well as the ecosystem as a whole. If either one of these platforms were to fail, however, there is a potential the fallout would have a catastrophic impact on the entire DeFi ecosystem. We believe that this shouldn't be the case as it is presents such signficant risk to the entire ecosystem. Instead, we believe that the new financial systems we build should avoid this notion of "Too big to fail" which has become rampant throughout the global economy over the last century, and in thurn, avoid the considerable problems that can lead to.
Among the problems that exist in DeFi lending today is the lack of diversity. Only a small set of views can be express within a single-pool lending model. In reality, however, a healthy crypto-economy is one in which participants not only hold a variety of views, but also have the ability to construct markets that reflect these views.