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32 changes: 28 additions & 4 deletions docs/concepts/benefits.md
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sidebar_position: 2
---

### A Gasless experience
## A Gasless experience

You're eager to deposit funds into a L1 DeFi protocol to earn yields or borrow assets, but have you considered the potential cost in gas fees? Could it be $20, $100, or a staggering $300? The same applies for withdrawals or repayments.

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At Nimbora, our primary objective is to foster inclusivity within the realm of DeFi. We firmly believe that individuals should have the opportunity to earn yields, regardless of whether they're investing $50 or $5,000. Financial constraints should never be a barrier to entry.

Our innovative solution involves batching user transactions, allowing for efficient execution and minimal gas expenditure [More details here](/docs/concepts/cost_efficiency).
By leveraging these cutting-edge technologies, we're breaking down barriers and democratizing access to DeFi opportunities for all.

### The Role of Starknet in Reducing Costs

### Expanding DeFi Access from Layer 2
Starknet plays a crucial role in Nimbora's ability to offer reduced gas fees. As an advanced Layer 2 solution, Starknet enhances the scalability of the blockchain by processing transactions off the main Ethereum chain. This process not only speeds up transactions but also significantly lowers the cost associated with them. By utilizing Starknet, Nimbora taps into these benefits, passing the savings directly to its users.

### Batching Mechanism: Pooling Transactions for Efficiency

Nimbora introduces an innovative batching mechanism that further enhances its cost-efficiency. This mechanism allows users to pool their transactions together, creating a collective action that can interact with DeFi protocols on the Layer 1 (L1) network at a fraction of the usual price. By doing so, Nimbora not only makes transactions more affordable but also fosters a more inclusive and accessible DeFi ecosystem.

![Gas](/content/pooling.png)


### The L2 Pooling Manager: Accumulating and Batching Requests

The transaction process begins when the Nimbora L2 Pooling Manager contract receives a request from a user. This contract acts as a collector, gathering individual requests into a new batch. The batching continues until the batch reaches its capacity. At this point, the L2 Pooling Manager packages all the requests into a single bundle and forwards it to the L1 Pooling Manager contract for further processing.

### L1 Verification and Asset Handling

Upon receiving the batch from the L2 side, the L1 Pooling Manager contract must wait for the batch to be verified on the Ethereum mainnet. This verification process is subject to network congestion but typically completes within a 12-hour window. Once verified, the L1 Pooling Manager interacts with the Starkgate Bridge to retrieve the necessary assets. These assets are then deposited according to the predetermined strategies.

### Reporting and Feedback Loop

The final step in the transaction process involves the L1 Pooling Manager generating a detailed report. This report confirms the successful deposit of assets and is sent back to the L2 Pooling Manager. This feedback loop ensures transparency and trust in the transaction process, allowing users to confidently engage with Nimbora's DeFi ecosystem.

By adopting these advanced mechanisms and leveraging Layer 2 solutions like Starknet, Nimbora is paving the way for a more affordable and accessible blockchain experience. Its innovative approach to transaction batching and cost reduction not only benefits individual users but also contributes to the broader goal of fostering a more inclusive DeFi ecosystem.



## Expanding DeFi Access from Layer 2

While Layer 2 (L2) solutions represent a significant innovation for scaling Ethereum DeFi, the majority of the ecosystem and liquidity remains rooted in Layer 1 (L1). It's important to acknowledge that L2 can take several years to mature into a resilient and robust DeFi ecosystem with deep liquidity. This challenge is further exacerbated when the L2 solution is not EVM-compatible, as protocols must allocate significant resources to deploy on these new platforms.

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{
"label": "Strategies",
"label": "Products",
"position": 3,
"collapsed": false
}
}
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### I don’t have enough LUSD to pay my debt, what can I do?

- If you don’t have enough LUSD in your account you can use the [Starkgate](https://starkgate.starknet.io/) bridge to bridge the LUSD amount required to pay your debt and get back your collateral.



### Understanding Risks Associated with Liquity

1. **Smart Contract Risk**:
- Liquity, like any other DeFi protocol, is vulnerable to smart contract exploits. Despite efforts to audit and secure the smart contracts, there remains a risk of undiscovered vulnerabilities. Exploits can lead to loss of funds or manipulation of the protocol.

2. **Liquidation Risk**:
- When users create a trove in Liquity, they must maintain a collateral ratio of at least 110%. Troves that fall below this threshold are subject to liquidation.

**Process**:
1. **Stability Pool Usage**: The system uses funds from the Stability Pool to cancel the debt of undercollateralized troves.
2. **Redistribution Mechanism**: If the Stability Pool lacks sufficient funds, a redistribution mechanism is activated, spreading the debt and collateral of liquidated troves among all trove holders.

**Penalty**:
Users facing liquidation may incur a penalty of up to 10%, which incentivizes them to maintain a safe collateral ratio.


3. **Redemption Risk**:
- Liquity allows direct redemption of LUSD stablecoins for the underlying collateral, Ether. This process carries certain risks for borrowers.

**Process**:
1. **Debt Cancellation**: Redeeming LUSD cancels debt from the riskiest trove in the system, i.e., the trove with the lowest collateral ratio.
2. **Collateral Transfer**: The redeemer receives a corresponding amount of Ether from the trove used for debt cancellation.

**Impact**:
Redemptions reduce the borrower's leverage and increase the overall collateral ratio of the system. While there's no additional penalty for borrowers, redemptions can lead to collateral loss and deleveraging of positions.


### Vigilant Surveillance:

In the realm of Nimbora, your trove's collateralization ratio is closely monitored by the protocol itself. While you can't directly alter this ratio, rest assured that Nimbora diligently adjusts the risk levels to safeguard against potential liquidations or redemptions.
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- [Website](https://makerdao.com/en/)
- [Docs](https://docs.makerdao.com/)
- [MakerDAO on Twitter](https://twitter.com/MakerDAO)



### Understanding Risks Associated with SDAI

1. **Smart Contract Risk**:
- sDAI, like other DeFi protocols, is susceptible to exploits, including smart contract vulnerabilities and malicious attacks.

2. **Regulatory Risks**:
- MakerDAO's shift towards RWA-based collateral introduces regulatory uncertainty due to its decentralized nature.
- Increased reliance on RWAs may lead to compliance challenges and potential regulatory gaps.

3. **Collateral Risks**:
- RWAs' default risks may result in collateral shortfalls, jeopardizing the 1:1 USD peg of sDAI.
- Fluctuations in the DAI Savings Rate (DSR) could strain liquidity buffers if significant amounts of sDAI are minted or burned abruptly.
- RWAs' sensitivity to interest rate fluctuations may lead to losses if redemptions are required before maturity.

4. **Collateral Risks**:
- MakerDAO's engagement with multiple counterparties exposes it to credit risks such as liquidity, reputation, and settlement challenges.

5. **Centralization and Transparency Risks**:
- Pursuing additional returns through RWAs may increase centralization within MakerDAO.
- Onboarding RWAs reduces transparency compared to on-chain crypto assets, posing transparency risks.

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- Protocol for Yield Tokenization: PENDLE is a protocol that facilitates the tokenization of future yield streams from decentralized finance (DeFi) protocols. It allows users to trade these yield streams in the form of principal tokens (PT) and yield tokens (YT).
- Innovative Yield Trading: PENDLE introduces innovative mechanisms such as Pendle Pools, which enable users to trade future yield streams before they are realized. This allows users to speculate on future yield movements and potentially earn profits from them.
- Splitting of Tokens: PENDLE splits the yield-bearing tokens into principal tokens (PT) and yield tokens (YT). PT represents the principal amount deposited, while YT represents the future yield generated by the deposited assets.
- Liquidity Provision: Users can provide liquidity to Pendle Pools by depositing their tokens, thereby participating in the tokenization and trading of future yield streams. In return, they receive Pendle tokens representing their share of the pool.
- Liquidity Provision: Users can provide liquidity to Pendle Pools by depositing their tokens, thereby participating in the tokenization and trading of future yield streams. In return, they receive Pendle tokens representing their share of the pool.


### Understanding Risks Associated with Pendle

1. **Smart Contract Risk**:
- Pendle's smart contracts have undergone rigorous audits by six of crypto's most respected firms to ensure their security.
- All of Pendle's smart contracts are open source, allowing anyone to monitor the codebase and identify potential vulnerabilities.
- Despite these measures, Pendle, like other DeFi protocols, remains susceptible to smart contract vulnerabilities and malicious attacks.

2. **Interaction with Third-party Protocols**:
- Pendle interacts with third-party protocols and contracts, introducing additional risk associated with the security and reliability of these external systems.
- Pendle explicitly disclaims responsibility for any funds lost due to exploits in third-party contracts, highlighting the importance of due diligence by users when engaging with such protocols.

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---
id: aave
title: Aave Lending
id: aave_usdt
title: Aave Usdt
sidebar_position: 1
sidebar_class_name: hidden
---

# Understanding Risks Associated with Aave
**Pendle LP stratgy, earn with USDT**

aUSDT is an interest-bearing token received when depositing USDT (Tether) into Aave's lending pools. It represents a user's deposited USDT plus accrued interest. Users earn interest on their deposited USDT in the form of aUSDT, which grows over time based on the interest rate offered by the lending pool.


### What is AAVE

- Decentralized Lending and Borrowing Platform: AAVE is a decentralized finance (DeFi) platform that allows users to lend and borrow cryptocurrencies without the need for traditional intermediaries like banks. It enables individuals to earn interest on deposited assets or borrow assets by providing collateral.
- Interest Rates and Algorithmic Adjustments: AAVE employs an innovative interest rate model that adjusts borrowing rates dynamically based on supply and demand dynamics within the protocol. This helps to ensure competitive and efficient utilization of assets while maintaining stability.



### Understanding Risks Associated with Aave

1. **Smart Contract Risk**: Aave operates on smart contracts, which are lines of code stored on the blockchain. While these smart contracts are designed to execute transactions autonomously, they are not immune to bugs or vulnerabilities. If there is a flaw in the smart contract's code, it could be exploited by malicious actors, potentially resulting in the loss of funds for lenders.

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---
id: flux
title: Flux Lending
id: flux_usdc
title: Flux Usdc
sidebar_position: 2
sidebar_class_name: hidden
---

# Understanding Risks Associated with Flux
**Pendle LP stratgy, earn with USDC**

FUSDC is an interest-bearing token received when depositing USDC into Flux Finance's lending pools. FUSDC represents a user's deposited USDC plus accrued interest. Users earn interest on their deposited USDC in the form of FUSDC, which grows over time based on the interest rate offered by the lending pool.




### What is FLUX

- Decentralized Lending and Borrowing: Flux Protocol, developed by the Ondo Finance team, facilitates decentralized lending and borrowing. It allows users to lend their assets to earn interest or borrow assets against collateral in a peer-to-pool (P2Pool) model.
- Support for Permissionless and Permissioned Tokens: Flux Protocol supports both permissionless tokens (e.g., USDC) and permissioned tokens (e.g., OUSG), with permissions enforced on a per-asset basis. This flexibility accommodates various token types and use cases within the protocol.


### Understanding Risks Associated with Flux


1. **Smart Contract Risk**: Flux operates on smart contracts, which are lines of code stored on the blockchain. While these smart contracts are designed to execute transactions autonomously, they are not immune to bugs or vulnerabilities. If there is a flaw in the smart contract's code, it could be exploited by malicious actors, potentially resulting in the loss of funds for lenders.
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