Revert Finance Tools
- Position Analytics Checks and easily tracks the performance of your positions on the AMMs protocols and chains or L2s.
- Incentives section displays the currently running incentives programs on the Uniswap v3 canonical staker contract, as well as the time-vested staker contract. Uniswap v3 position dashboards automatically detect and display the rewards accrued by each position.
- Auto Compounder allows liquidity providers (LPs) to automate the process of compounding accrued fees in exchange for a fixed percentage of the compounded fees. This allows the maximum amount of compounding to be incentivized at the optimum time in terms of gas cost.
- Position management. Liquidity providers can initiate and manage their positions from within Revert. LPs can add or remove liquidity and claim fees.
- Auto-Exit feature allows you to pre-configure your position so that liquidity is automatically withdrawn when the pool price reaches a predetermined value. Moreover, you can customize the system so that it swaps one token for another when withdrawing funds, securing your investment akin to a stop-loss order.
- Auto-Range automates the process of rebalancing your liquid positions. When the token price moves and your position moves out of range by the percentage you choose, Auto-Range comes into play. The system then automatically rebalances your position by removing the liquidity and re-creating it with the same range width but centered around the current price, ensuring that your liquidity stays in range and always collects fees.
Revert Lend
Revert Lend is a decentralized lending platform for Uniswap v3 liquidity providers. It allows users to use their positions in Uniswap v3 as collateral to borrow ERC-20 tokens. Even when their positions are used as collateral, users can manage and optimize them, giving them full control over their capital. Revert Lend is directly integrated into the regular position management user interface on Revert.
Revert's current automation tools, such as Auto-Range and Auto-Compound, work with collateralized positions in the same way as regular LP positions.
Borrowing against LP position
In the Revert Lend protocol, users can deposit their Uniswap v3 LP position as collateral and borrow tokens in a single step. The LP position, represented as an NFT, is transferred to the Vault contract, effectively locking it into the protocol. This pledge allows the user to immediately borrow tokens from the lending pool. The number of tokens that can be borrowed is determined by the collateral value of the LP position, based on the lower of the collateral ratios of the two assets in the LP pair. Borrowed tokens are typically issued as a protocol-defined ERC-20 token, such as USDC, and credited to the user's account for use in other investments or purposes. The LP position remains locked in the vault as collateral until the loan is repaid.
Accumulating Interest
Once tokens are received, the debt begins to accumulate interest according to the protocol's interest rate model. Over time, the interest is added to the loan balance, increasing the total amount the borrower owes. This interest rate is dynamic and adjusts based on supply and demand in the lending pool. Borrowers need to keep an eye on their debt because accumulating interest can affect the health of the loan, which can lead to liquidation if the debt becomes too large compared to the collateral value.
Loan Health
The health of a loan is a measure of how securely the loan is backed by the value of its associated Uniswap v3 LP position. A loan is considered “healthy” if the value of the collateral (LP position), taking into account collateral factors, exceeds the outstanding debt associated with that loan.
When a loan becomes unhealthy, the position can be liquidated to cover the debt. The protocol uses the liquidation process to ensure that the debt is covered, and the value remaining after liquidation is returned to the original owner.
Lending
When a user decides to lend tokens under the Revert Lend protocol, they deposit their assets into a loan pool that conforms to the ERC-4626 Tokenized Vault Standard. Once deposited, the lender receives rlTokens, such as rlUSDC, which represent his share of the loan pool. These rlTokens are equivalent in value to the underlying tokens at the time of deposit and serve as proof of the lender's contribution to the pool.
Accumulating Interest
As borrowers take out loans from the loan pool, they repay them with interest. This interest accumulates in the loan pool and increases the value of rlTokens over time. Initially, rlTokens have a 1-to-1 exchange rate against the posted asset, but as interest accumulates, their value increases. This means that when the lender eventually redeems his rlTokens, he will receive more than he originally invested, reflecting the interest earned on his borrowed tokens.
Repaying
When repaying a loan, the borrower needs to return the amount of tokens they originally borrowed, as well as any accrued interest. The total repayment amount is determined by the current debt exchange rate, which includes accrued interest. Borrowers can make full or partial repayments, depending on their preferences. With each repayment, the borrower's outstanding debt is reduced by the repayment amount.
- Repayment using collateral and atomic swap. In some cases, borrowers prefer to repay the loan using the collateral itself. This process can be accomplished atomically, meaning that collateral is exchanged directly for loan tokens in a single transaction. By exchanging a portion of the collateral for borrowed tokens, the borrower can effectively reduce their debt without resorting to additional external funds.
- Complete repaying loan and withdrawing LP position from the vault. When the loan is fully repaid, including all accrued interest, the borrower's obligations are considered fulfilled. At this point, the LP collateral position that has been locked into the Vault contract is released. The borrower can then withdraw his Uniswap v3 LP position from the Vault. This gives him back full control of the LP assets, allowing him to manage, trade or reinvest the position as he sees fit.
Leverage
Leverage in the Revert Lend protocol refers to a strategy of increasing a user's exposure to market positions by borrowing additional collateralized tokens and reinvesting those tokens into their position. This allows users to control a larger position than they would with their initial capital, potentially increasing their returns. However, the use of leverage also increases risk, as losses can be as large as gains.
Liquidation
Once a position is recognized as unhealthy and goes into liquidation, any account in the protocol can initiate the liquidation process. To do so, the user pays off the outstanding balance of the position and in return receives a liquidation fee. This reward, known as a liquidation penalty, ranges from 2% to 10% of the value of the debt, depending on how close the debt is to the value of the collateral. This system incentivizes users to actively monitor the protocol and liquidate risky positions, helping to maintain the stability and integrity of the loan pool.
Liquidation bots
The Revert Lend protocol offers an open-source liquidator bot that can be controlled by anyone. This bot monitors the health of all positions within the protocol and initiates liquidation when a position becomes unhealthy - that is, when its debt exceeds its collateral value.
