Twyne is a credit delegation layer that routes credit within lending markets to users who need it most.
- Borrowers seeking higher leverage can pull borrowing capacity from other lenders.
- Lenders activate idle capacity and earn delegation fees on top of their base lending rates.
Both users remain fully within the underlying lending market; their positions are temporarily combined to optimize outcomes for both.
Today's lending markets like Euler and Aave suffer from two core inefficiencies:
- Over half the lenders aren’t using their borrowing capacity, lowering utilization rates for everyone and missing out on extra yield for themselves.
- Borrowers are forced to opt in to conservative Liquidation Loan-to-Value (LLTV) ratios, which artificially limits their max leverage exposure and causes premature liquidations.
Instead of tackling them in a vacuum, Twyne makes these 2 problems solve each other.
In creating a marketplace for borrowing power, Twyne lets lenders (called Credit-LPs) earn additional APY by delegating their credit. On the other hand, borrowers on Twyne can utilize this extra credit capacity in several different ways: more defensively to create a larger safety buffer against liquidations, or more offensively to leverage up much higher than the underlying market allows.
{% hint style="info" %} These docs will cover how Twyne works and explore its core use cases, liquidation mechanism, interest rate design and more. {% endhint %}