Malbec Finance

Currently, AMMs face the issue that assets remain locked in the liquidity pool for certain price ranges. Although this has improved in later versions of liquidity providers, the inefficiencies remain due to there being liquidity intervals that are not reached frequently.

Malbec.fi's solution comes to solve this issue. We enable utility (via lending) by unlocking the previously locked liquidity. Matchmaking can now be done between users that want to provide certain liquidity on certain price ranges and users that would like to borrow assets associated with those ranges.

Virtualization of the swap curve using synthetics and hooks (leveraging v4 liquidity providers) lies at the core of the solution, unlocking the endless universe of possibilities for liquidity providers.

To enable this in practice, we leveraged Uniswap v4 hooks, where we can intercede in contract calls and build the virtualization of the swap curve.

Our lend hook contract manages liquidity. To preserve the characteristics of the pool, the lender contract also interacts with a synthetic pool of assets that mimics the correct behavior of the liquidity pool. By doing so, end users interaction with the pool is transparent, without having any additional considerations or difficulties.

Liquidity in the lender contract can be lent to users that wish to take a loan in a price range and provide collateral on the liquidity borrowed. By the use of an oracle, if price meets the liquidation range, the lender contract liquidates collateral to keep the pool balance in place.