Iron Bank

Iron Bank is a decentralized protocol to protocol lending platform. It allows trusted protocols to borrow funds without posting collateral via whitelisting. It is helping build a better and safer DeFi lending ecosystem, by driving capital efficiency as the liquidity infrastructure and backbone for DeFi and CeFi.

Iron Bank provides on-chain undercollateralized/ zero-collateral lending for selected borrowers on Ethereum, Avalanche and Fantom with a unique soft liquidation feature. Lenders can also deposit digital assets on Iron Bank to earn stable yield.

The Iron Bank is CREAM’s paradigm-shifting protocol-to-protocol lending platform and liquidity backstop for the entire DeFi ecosystem. The critical innovation at the heart of the Iron Bank is zero-collateral lending — protocol-to-protocol loans will use a credit system that is not currently possible with existing peer-to-peer lending solutions, all of which are overcollateralized.

Once a protocol has been whitelisted, and a credit limit set, it can begin to borrow funds from CREAM v2 directly. This is essentially the same function that determines whether a CREAM borrower who has posted collateral to CREAM has enough collateral to allow them to borrow more. Only now, the crucial difference is that protocols won’t have to waste their own liquidity in order to receive the funds that they need.

The available pool of assets that protocols can borrow from CREAM v2 is currently limited to wETH, DAI, and y3Crv. You can find these and future CREAM v2 assets on Yearn Finance’s lending portal.

While CREAM v2 will remain limited to blue chip assets, new assets will continue to be listed on CREAM.Finance for collateralized peer-to-peer lending.

• Yearn Vaults

As the much anticipated Yearn v2 is rolled out, strategists will be able to borrow assets from the Iron Bank. The Iron Bank will enable Yearn yVaults to develop leveraged yield-farming strategies and cross-asset strategies. Users will be able to deposit DAI and borrow an equivalent dollar amount of ETH via CREAM then enter SushiSwap liquidity pools utilizing Alpha Homora’s leveraged yield-farming product. Users will ultimately be able to obtain 90x leverage on stablecoins or 80x leverage on ETH to farm SUSHI, CRV, ALPHA. If the user uses Yearn yVaults they will also potentially be eligible to earn PICKLE.

Additionally, Yearn is launching an abstraction to leverage every yearn strategy via the Iron Bank.

• Alpha Homora V2

Alpha Homora V2 will borrow liquidity from CREAM V2 and offer that liquidity as leverage to its users. CREAM’s users will benefit from higher lending interest rates that accompany an increase in demand to borrow assets. In the meantime, both Alpha Homora and its users will benefit from deeper liquidity for leveraged yield farming.

The CREAM protocol reserve pool earns fees via the reserve factor as more borrowers enter the CREAM market to borrow. With fully collateralized loans, these fees are constrained by the amount of assets that are deposited in the protocol, the collateral factor, and the asset cap.

Allowing whitelisted borrowers to tap into CREAM’s liquidity will increase potential earnings for the protocol with more capital efficiency, leading to increased revenue for CREAM holders.