Peapods(PEAS) SugarSnap Lending v1 launches

SugarSnap Lending v1' launches: Borrow against $PEAS and pair Pod tokens with yield-bearing $apUSD

One of the main challenges of siloed lending pairs is liquidity fragmentation, as assets in one lending pair are isolated from all other lending pairs. This increases the safety of the protocol, but means new pairs cannot build upon existing markets, and must attract their own liquidity from scratch.

But how does a new market start?

Without suppliers, there can be no borrowers. And without borrowers, there is no known demand to present a yield to attract the needed suppliers. A true chicken-and-egg scenario.

Outlook on ‘Leveraged Volatility Farming'

With SugarSnap v2, which will be at the core of our upcoming upgrade ‘Leveraged Volatility Farming' (LVF) we'll introduce Peapods-protocol-native lending contracts for apUSD and all other Pod pairing assets. These will enable users to borrow the pairing asset, allowing them to effectively provide single-sided liquidity by just supplying the Pod token.

The ability to borrow the pairing asset enabled by LVF will make providing liquidity into Pods' Dex pools significantly more capital-efficient for many users. Consequently, we expect LVF to drive demand for apUSD, which in turn will increase supply into the PEAS Silo lending pair, reducing borrowing rates.

With sufficiently low USDC borrowing rates, LVF will effectively enable the rehypothecation of USDC from the PEAS Silo lending pair to provide liquidity for apUSD into Pods. This has the potential to further significantly enhance capital efficiency.

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