Peridot Protocol
  • Introduction
    • Overview
      • What is Peridot?
      • Our Mission & Vision
      • Key Value Propositions
    • Why Cross-Chain DeFi?
      • Current Challenges in DeFi
      • How our Hub & Spoke model addresses these challenges
  • Architecture & Design
    • System Architecture
      • Overview of the Hub & Spoke Model
    • Core Components
      • Compound Based Lending & Borrowing Modules
      • Wormhole Integration: Token Transfer with Payload
      • On-Chain Accounting & Interest Rate Models
    • Integration Details
  • Easy Mode: Onramp & Offramp for New Users
    • Overview of Easy Mode
    • Goals
    • Key Features
  • Contact
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  • Global Vaults
  • Interest Rate Model
  • Risk Management
  1. Architecture & Design
  2. Core Components

On-Chain Accounting & Interest Rate Models

All lending, borrowing, and interest calculations in Peridot happen on-chain — specifically, in the Hub Contract.

Global Vaults

Each user has a vault managed centrally:

  • Tracks all collateral deposits and borrowed assets

  • Vaults are chain-agnostic: a user can deposit on Solana and borrow on Ethereum

  • Vault states are updated based on messages from Spoke Chains

Interest Rate Model

We extend the Compound V2 model, using:

  • Utilization-based interest rate curves

  • Variable APR based on asset demand

  • Configurable parameters for each market (base rate, slope, kink)

This model allows the protocol to:

  • Incentivize lenders with attractive APY

  • Adjust rates dynamically to optimize capital utilization

  • Respond to market shifts in real time

Risk Management

  • Collateral ratios and liquidation thresholds are enforced globally

  • Price data is pulled from Pyth and/or Witnet

  • Liquidations are triggered on the Hub, ensuring atomic execution and fairness

Our accounting and rate system provides accurate, efficient, and secure financial logic — across chains.

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Last updated 11 days ago