Lateral Protocol

Multi-collateral debt position backed Stablecoin with optimized weighted-asset reallocation

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Inspiration

We want to build our own CDP backed stable but utilize chainlink services to implement dynamic risk management on dynamical sized basket of collateral.

What it does

The protocol allows users take loans against deposited collateral and can choose different automated reallocation strategies to optimize collateralization. It also relies on liquidations to ensure that the stablecoin is sufficiently backed.

How we built it

With a team of 2, Evan and Maroutis, we built the contracts using Foundry with Chainlink and Open Zeppelin contracts, and built a typescript API which performs Monte Carlo simulation to find the optimal weight allocation of well chosen basket of assets. The API is called by the contract through Chainlink function.

Challenges we ran into

  • Getting chainlink functions to work with Foundry.
  • Converting numbers between Oracles.
  • Contract size limitation became a challenge that we solved by rethinking the architecture

Accomplishments that we're proud of

  • Being able to quickly iterate, especially given our differing timezones
  • Harmonizing skill-sets with engineering and quantitative finance.
  • Combining different chains and protocol together : Chainlink / Uniswap

What we learned

  • Chainlink functions are the entry point to an unlimited potential when it comes to modelling and simulations.
  • Portfolio rebalancing with uniswap.
  • Algothmic stablecoin management : minting/liquidations ...

What's next for Lateral Protocol

  • Formalize protocol's economics
  • Develop Front-end for on-boarding and vault management
  • Simplify contract design, especially around liquidations
  • Utilizing Chainlink functions to call more sophisticated models for portfolio management (in python).

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