LTV

Our project introduces a new kind of DeFi primitive - permissionless leverage tokens. It's the ERC-4626 vault that's designed to collectively manage leveraged positions in lending protocols while maintaining a target Loan-to-Value (LTV) ratio. This system eliminates the need for human curators, creating a scalable and permissionless building block for DeFi products. It empowers any user to deploy leverage vaults for any pair of tokens, on top of any leverage source, without exposure to the counterparty risks.

At its core, the vault relies on a mathematical model. It governs the rebalancing of the vault whenever there are changes in borrowing or collateral assets, ensuring the target LTV (larger leverage) is consistently maintained. Rebalancing occurs through an auction mechanism with built-in incentives, seamlessly adjusting the vault at each interaction with the vault (like deposits or withdrawals).

The formal model was designed by the LTV team prior to the hackathon, but within the scope of ETH Global, I developed a Solidity PoC for the core vault functionality.

During the hackathon, I focused on deploying and testing the core components of our leverage vaults. This included 4 main flows (deposit, withdraw, mint, redeem) to ensure that the contract's math aligns properly with the state.

For the PoC implementation, I used Foundry (Anvil, Forge, Cast) for setting up the local environment, and deployment of the Solidity contracts.

For testing purposes, I used ABI Playground (https://lovethewired.github.io/abi-playground) with Metamask configured to the local Anvil node.