The Warp Protocol

The Warp Ecosystem

The Warp Protocol’s primary objective is to create a novel use case for unused Liquidity Provider (LP) tokens by allowing them to be used as collateral for borrowing.

Users will be able to deposit LP tokens onto the Warp platform and receive stablecoin loans in exchange, while their LP tokens continue to earn from Uniswap’s rewards.

By lending LP tokens compared to other assets, users are able to continue earning trade fees from Uniswap, reducing the effective interest rate paid.

Demand (Borrowers)

At launch, users seeking loans will be able to deposit the LP tokens generated from the following four Uniswap pairs (WBTC- ETH), (ETH-USDC), (ETH-USDT), (ETH-DAI).

These pairs will be deposited at 150% over-collateralization. In other words, the user deposits at least 1.5 times the value of money they will borrow.

These borrowers then receive a loan of DAI, USDC, or USDT at a specific interest rate, which will fluctuate based on the availability of the respective stablecoin within the liquidity pool. All while still earning the 0.3% from Uniswap per trade made in the respective liquidity pool.

Through the Warp platform returns would look like the following:

YieldTotalCollateralInterestRate+Stablecoin(YieldUserDerived)YieldTotal Collateral-Interest Rate +Stablecoin(YieldUser Derived)

This results in the borrowers having the stablecoin to deploy in other platforms with an effective interest rate of:

InterestRateYieldTotalCollateral Interest Rate-YieldTotal Collateral

Once the loan has been repaid, users may withdraw their collateral.

Supply (Lenders)

Lenders will be able to supply DAI, USDC and USDT on Warp Finance.

In return, suppliers will receive either wDAI, wUSDC or wUSDT, which are interest-earning tokens that indicate a deposit into Warp.

On withdrawal, suppliers will receive back the stablecoin they initially deposited plus the interest earned.

Platform Reserves and Development

The Warp Protocol collects 5% of interest accrued and stores the funds in a treasury wallet. At first, these funds will be used as a reserve and for continuous development of the platform. Once governance is live, the community will be able to decide on the usage of these funds.