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xLend

xLend

xLend is the native lending protocol built by ODX Labs (@odxlabs), running parallel to the xAsset Protocol.
It allows users to supply USDC to earn yield and borrow USDC against xAssets as collateral — with significantly reduced risk thanks to ODX’s control over the primary mint/redeem market.

xLend turns xAssets into powerful DeFi collateral while maximizing protocol revenue through interest spreads, liquidation fees, and ecosystem flywheels.

Overview

xLend is an overcollateralized lending market optimized for xAssets (xBTC, xSOL, xETH, xXRP, etc.).

Key differentiators:

  • xAssets as collateral — Use your minted xAssets to borrow USDC without selling.
  • USDC as borrowable asset — Supplied by lenders, used by borrowers for leverage, yield farming, or spending.
  • Primary market-powered liquidations — ODX executes liquidations via its own mint/redeem flow for best-price execution, minimal slippage, and near-100% recovery rates.
  • No xAsset lending — Keeps the system simple and avoids impermanent loss risks.

This design aligns with the dominant DeFi pattern: volatile assets as collateral → stable borrows → high adoption and TVL.

How It Works

Supplying USDC (Lending)

Users deposit USDC into isolated xLend markets to earn variable interest.

  • Earn APY based on utilization (higher demand = higher yields).
  • Withdraw anytime
  • Protocol takes a reserve factor (15–25%) from interest as revenue.

Borrowing USDC

Users deposit xAssets as collateral and borrow USDC.

// High-level borrow flow
1. Approve and deposit xAsset (e.g., xSOL) as collateral
2. Set collateral factor (e.g., enable as collateral)
3. Borrow USDC up to LTV limit (e.g., 60–75% depending on asset risk)
4. Repay USDC + interest later to withdraw collateral
  • Overcollateralization: Recommended 150–200% ratio.
  • Health factor monitored via oracles (Chainlink + ODX feeds).
  • Borrow rates: Dynamic, utilization-based (typically 4–10% for high-demand assets).

Liquidations

The main feature: ODX’s primary market control.

When a position becomes unhealthy (health factor < 1):

  • Liquidators (permissioned or open) trigger liquidation.
  • Protocol redeems the xAsset through primary market (custody → sell underlying at spot).
  • Recovers USDC at near-optimal price.
  • Liquidation bonus: 5–10% (lower than typical due to efficiency).
  • Result: Much lower bad debt risk → safer for lenders → higher USDC supply.

Supported Markets

  • Collateral: xBTC, xETH, xSOL, xXRP, xDOGE (isolated pools per asset for risk containment)
  • Borrow asset: USDC
  • Chains: Base, Polygon (matching xAsset deployments)

More xAssets and borrow assets added over time.

Revenue for ODX Protocol

  • Reserve factor on borrow interest (~15–25% cut)
  • Liquidation fees (5–10% of collateral value)
  • Origination fees (optional small flat fee on borrows)
  • Flywheel effect: More borrowing → increased xAsset demand → more primary mint/redeem fees

Benefits

  • Superior risk management — Primary market liquidations outperform DEX-based ones.
  • Deeper liquidity — Attracts USDC suppliers with safer yields.
  • Ecosystem growth — Borrowers need xAssets as collateral → drives primary mint volume.
  • Composable — xLend positions integrate with DEXes, yield farms, etc.
  • Tax-efficient leverage — Borrow against holdings without selling.

Risks & Mitigations

  • Oracle price risk → Mitigated by Chainlink + redundant feeds.
  • Volatility → Strict LTV ratios and auto-liquidation thresholds.
  • Liquidity risk → Primary market ensures efficient exits.

Integration

  • Developers can interact directly with xLend contracts (Aave v3-inspired fork with custom liquidation hooks)
  • xLend is live on testnet — mainnet coming soon.
  • For questions or institutional access, reach out via @odxlabs.
OverviewFee Model