nirholas Lending Protocol Comparison
When to use this skill
Use when the user asks about:
- Where to lend or borrow a specific asset
- Comparing interest rates across lending protocols
- Understanding liquidation risks and collateral ratios
- Evaluating lending protocol safety
- Optimizing a lending/borrowing position
Comparison Framework
1. Protocol Inventory
For each protocol under comparison, gather:
- Protocol name, version, and chain deployment
- Total supplied and total borrowed for the target asset
- Utilization rate and rate model type (linear, kinked, or dynamic)
- Governance token and incentive status
2. Supply Rate Analysis
Compare supply-side economics:
- Base supply APY — the rate paid to lenders from borrower interest
- Incentive APY — any additional token rewards for supplying
- Net supply APY — combined effective return
- Rate stability — how much has the rate fluctuated over 7d/30d?
- Utilization sensitivity — at what utilization does the rate spike?
3. Borrow Rate Analysis
Compare borrow-side costs:
- Variable borrow APR — current and 30d average
- Stable borrow APR — if available, and conditions for rebalancing
- Rate model kink point — the utilization threshold where rates jump
- Effective borrowing cost after any incentive offsets
4. Collateral Parameters
For each protocol, document:
- Loan-to-Value (LTV) — maximum borrowing power per collateral unit
- Liquidation threshold — the LTV at which liquidation triggers
- Liquidation penalty — the bonus liquidators receive (user's loss)
- Collateral types accepted — which assets can be used as collateral
- Isolation mode — is the asset in isolation with debt ceilings?
- E-mode — are there efficiency modes for correlated assets?
5. Risk Assessment
| Factor | Evaluation |
|---|---|
| Protocol audit history | Number, recency, and firms |
| Bug bounty size | Indicates confidence in security |
| Oracle mechanism | Chainlink, TWAP, custom? Freshness? |
| Governance timelock | Delay before parameter changes take effect |
| Bad debt history | Any past insolvency events? |
| Supply caps | Are there deposit limits? |
| Borrow caps | Are there borrowing limits? |
6. Liquidation Scenario Modeling
For the user's intended position:
- Calculate the liquidation price given their collateral and debt
- Estimate the buffer (current price vs liquidation price as percentage)
- Model what happens if collateral drops 20%, 40%, 60%
- Recommend a safe health factor target (suggest 1.5+ for volatile assets, 1.2+ for stablecoins)
7. Output Format
Present a comparison table and recommendation:
| Metric | Protocol A | Protocol B | Protocol C |
|---|---|---|---|
| Supply APY | X% | Y% | Z% |
| Borrow APR | X% | Y% | Z% |
| LTV | X% | Y% | Z% |
| Liquidation threshold | X% | Y% | Z% |
| Liquidation penalty | X% | Y% | Z% |
| Audit status | ... | ... | ... |
- Best for lending: Protocol recommendation with reasoning
- Best for borrowing: Protocol recommendation with reasoning
- Risk-adjusted pick: Considering security, rate stability, and terms
- Position recommendations: Suggested health factor and monitoring frequency