📓Asset Listing

Echelon core protocol facilitates the supply and borrowing of digital assets through liquidity pools. When users supply assets, they receive protocol-issued tokens that represent both the supplied assets and the accumulated yield. Collateral secures each loan, serving as a safeguard against default. While Echelon is not directly responsible for the activity/liquidity of any specific pool, many considerations must be addressed by it's core contributors before creating new markets

For V1, the following considerations apply to listed assets:

  • Each new token adds a permanent, slight increase to transaction gas costs due to the added complexity in the smart contracts.

  • Introducing a new token as collateral elevates the protocol's insolvency risk. Tokens used as collateral are effectively the protocol's assets, and borrowed tokens represent its liabilities. Since borrows are primarily stablecoins and collateral is often in volatile assets, the following principles are key:

  • Only assets with strong risk profiles should be supported as collateral.

V1's is designed to mitigate the insolvency risk when listing new, riskier tokens.

  • Centralized assets as collateral introduce a centralization risk due to single points of failure that affect the Echelon protocol.

  • Assets with potential oracle manipulation risks are restricted to single-asset borrowing to prevent multi-asset exposure.

Tokens that are enabled solely for supply and borrowing, not collateralization, present a lower risk. These tokens must always be significantly overcollateralized to ensure protocol solvency. For example, a user may supply MOD as collateral and borrow MOD backed by this collateral; however, assets not permitted as collateral must always be borrowed against less risky assets.

Diverse liquidity sources mitigate risk through diversification.

When onboarding a new token, it's crucial that the Echelon community conducts thorough analysis to ensure the asset introduces more value than risk. Only tokens with a substantial backing and a significant community presence should be considered. Our asset risk methodology provides a framework to evaluate tokens' risks to the protocol and calibrate parameters accordingly to manage those risks.

Management of New Market Listings

The introduction of new tokens into the Echelon ecosystem will initially be overseen by the Echelon core team. In the future, this responsibility will transition to the Asset Listing Governance Team, which will operate under the guidance and decisions of Echelon token holders. Further details on this process will be shared in due course.

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