RIZ

Radiant Innovation Zone - Isolated Markets

Introduction to RIZ Markets

Radiant Innovation Zone (RIZ) introduces isolated lending markets, allowing users to engage in borrowing and lending with distinct pairs of assets in separate, isolated pools. This innovative approach enhances risk management and offers increased flexibility compared to traditional shared liquidity pools.

Within RIZ, different types of assets can be launched, each with its own parameters. This means there will be isolated pools with varying risk exposures, each independent from the others and the core markets.

The risk factor is usually associated with higher returns, compensating for the additional risk. Users must understand these risks and conduct thorough analyses before participating.

What are Isolated Markets?

RIZ Markets are specialized lending pools where users can:

• Supply a designated collateral asset.

• Borrow the same asset, with the possibility of adding leverage (a process known as looping).

• Borrow its counterpart.

Each RIZ Market operates independently, enabling more accurate risk assessment and mitigation strategies. Despite this independence, these markets share a common vault system, USDC or WETH, which helps optimize yield and manage liquidity more efficiently.

Key Features of RIZ Markets

Asset Specificity: Each market is dedicated to a specific pair of assets, such as a stablecoin and a risky asset (e.g., PEPE, SHIB) or a volatile asset and a correlated risky asset (e.g., WETH and ETH-LRTs).

Oracle Router: This new contract routes price requests to the correct Oracle. It currently supports Chainlink and Pyth Oracles, and more will be added.

Bad Debt Manager (BDM): A contract deployed uniquely for each RIZ Market to socialize bad debt generated by significant events methodically. This mechanism prevents a rush to withdraw and ensures that users responsible for bad debt cannot participate in asset withdrawals, acting as a safeguard against bad debt accumulation.

Shared Vault System: RIZ Markets utilize a shared vault (USDC or WETH) to centralize and optimize asset management. This shared vault provides a higher yield for users who prefer a more straightforward participation method. For more information about the vault, click here.