We are excited to introduce Omni, the next evolution of the Beta protocol. Omni will go live on Sepolia this September 28th, with details on gaining exclusive early access and supporting the protocol on its journey to Mainnet to be announced at the beginning of that week. Since we first announced Omni a few months ago, we have continued to advance the mechanism design to innovate the fundamental structure of decentralized money markets. Our research and development teams have focused on the most significant open problem in decentralized lending:
💡 Open Problem: Inherent asset risks create fragmentation of liquidity and rigid market structures*
*See previous blog
The Omni protocol is a composable, dynamic, and safer money market capable of handling all collateral types and borrow types with zero fragmentation and maximal capital efficiency—the first of its kind.
Are you currently a lender on Aave or Compound? Omni allows you to customize your risk parameters for even more yield, while also providing low-risk lending options should you prefer to stay on the safe side.
For Lenders: Personalize your loan risk appetite with zero liquidity fragmentation and compartmentalize positions into subaccounts.
For Borrowers: Use long-tail assets, like SHIB 🐶, as collateral in addition to stablecoins, LSDs, and more, to borrow one or multiple assets all at the same time and all from a single wallet.
And much more for everyone…
We believe Omni will become the only money market participants in DeFi need to use, eliminating the need for different money market protocols and fragmentation. But before we delve into the features enabled by this innovation, let’s understand why the Omni protocol is such a big deal.
To comprehend the importance of Omni’s innovations, let’s examine the history and landscape of decentralized money markets. Money market design can be categorized into three main types: peer-to-peer (P2P), pool-based, and isolated:
1.0: The traditional P2P model has been attempted many times but suffers from high fragmentation of assets and a poor user experience. As a results, this prevents it from scaling up as it often has inadequate liquidity and limits itself to niche user groups and loan situations.
2.0: The pool model significantly improves the user experience for on-chain lending and borrowing through standard configurations, but these same standard configurations prevent customization and change. This causes pool based markets to stagnate with no growth or usage expansion.
3.0: The isolated pool and isolated pair models are extensions of the pool and P2P models, respectively, that allow riskier asset listings. However, both these models incur high fragmentation, as assets are not shared between isolated pools and isolated pairs. This renders yield too low to be sustainable for the amount of risk taken.
In addition, decentralized money markets today are not fair for lenders and most borrowers.
As an analogy, imagine you wanted to deposit your money to earn interest from loans backed by high-quality mortgages. But the bank forces you to accept that your money will also be used to back junk mortgages. This is exactly what happens right now; lenders must accept the entire set of collateral designated by the protocol or take their money elsewhere.
As another analogy, imagine you gave out a loan to someone with a 500 credit score and another loan to someone with an 800 credit score. Normally, you should earn a higher interest rate for the loan you’re giving to the 500 credit score, but the bank says you’ll earn the same from both. This is what happens right now in on-chain money markets! Depositors lose out on additional interest, and borrowers using ETH as collateral only need to pay higher interest rates at the expense of the borrowers using CRV as collateral only.
Because we’re unable to differentiate lenders within a pool, protocols are also forced to be extremely careful when listing new assets as collateral. One wrong misstep, and the protocol can be loaded with millions in bad debt. This has caused growth to stall and forces protocols to take months to years to list new assets as collateral. This has limited usage to the same 10 assets, mostly stablecoins and ETH, as collateral, preventing many financial opportunities.
The Omni Protocol introduces many novel mechanism designs for money markets. These novel designs and algorithms span from pool structure to risk management, oracles, account management, to tokenomics. We’ll first introduce a few core features that are now enabled on the protocol, as well as how we create a 10x better user experience for on-chain lending.
Lending is now personalized to the risk appetite of lenders with zero fragmentation.
Want to lend and only accept stablecoins and ETH as collateral? We’ve got you covered. You’ll earn interest from everyone using stablecoins and ETH as collateral, while restricting borrows to only people using stablecoins and ETH as collateral.
Want to also lend to SHIB 🐶 (Shiba Inu) in addition to stablecoins and ETH as collateral? Want to make sure SHIB users pay higher interest rates than borrowers using stablecoins? We’ve got you covered. You’ll earn the same interest as the first user plus the higher yield from everyone using SHIB as collateral.
Now, as a lender:
You don’t need to worry about losing out on yield when taking on greater risks, and you’ll be paid better interest rates.
You don’t need to worry about putting your assets at risk when others in the same pool want to take more risk.
You’re always with choices and fully in control.
Borrowers are now able to access the deepest liquidity for any respective collateral type. There is zero fragmentation for deposits available to a given collateral type, meaning borrowers get access to the maximum liquidity always.
Want to use SHIB🐶 as collateral? We’ve got you covered. Want to use your favorite project's token as collateral? We’ve got you covered. Omni is the only protocol that is able to cover all asset types for collateral and borrowing.
Adding new tokens as collateral is now a significantly less risky process w/ Omni’s proprietary mechanism and can happen in as fast as a week. New memecoin 🍌? Check back in a week.
Pay lower interest rates based on your collateral. Borrowers have different interest rates based on the risk grade of the collateral they use.
All the same borrowing options you know and use are still available: cross, isolated, and high-efficiency modes. Omni enables everything you're familiar with in money markets and more.
Manage all your loan positions through a single wallet and have flexibility through gasless creation of subaccounts. It’s that simple, and there’s zero risk of someone accessing your subaccount as long as you control your wallet.
Never sacrifice capital efficiency for your user experience anymore. You can keep all the assets you want to use for the protocol in one wallet.
Opening a new subaccount is the same as having a clean wallet address. Each subaccount is isolated from each other. Manage everything safely through one account, and never worry about messing up your positions again.
No more wasted gas spending. Every subaccount is gasless to create; only pay the gas to enter the markets you want to enter.
Omni makes it 10x easier to open and manage loans compared to any other money market out there.
This is just the tip of the iceberg. Further details related to new features and new tokenomics centered around $BETA will be unveiled as we head towards Mainnet. We understand there is much anticipation around this, and we are moving fast and safe. The first stage will soon be initiated to battle-test the Omni protocol on Sepolia, and details for gaining exclusive access will be unveiled during the week of the Sepolia launch.
The Omni protocol is the latest evolution in decentralized money markets. With its composable, dynamic, efficient, and safer approach, the Omni protocol aims to eliminate the liquidity fragmentation and rigid structures in decentralized lending. Omni will be the only lending protocol needed. It is able to adapt faster to market conditions than any previous lending protocol. It allows:
For Lenders: Personalize your loan risk appetite with zero liquidity fragmentation and zero wallet fragmentation.
For Borrowers: Use long-tail assets, like SHIB, as collateral in addition to stablecoins, LSDs, and more, to borrow one or multiple assets all at the same time and all from a single wallet.
And much more…
We are excited to have the Omni protocol go live on Sepolia this September 28th. We will be releasing details on how users can sign up for exclusive early access to the new product during the week of the product launch. To stay updated with the latest news on Omni, make sure to follow our socials on Twitter and join our Discord.