Isolated Pools
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Isolated pools are specialized lending markets designed to securely introduce new or higher-risk assets without impacting the overall stability of the protocol. Theyβre ideal for users looking to lend or borrow non-traditional assets or those with higher volatility, while maintaining a safe and reliable ecosystem.
How They Work:
Each isolated pool operates independently of the main lending market.
Risks (e.g., price volatility or liquidity concerns) are confined to the specific pool.
Any issues in one pool (defaults, liquidations) do not affect the protocol's core assets or broader markets.
Use Case Example:
A new or experimental token is added to an isolated pool.
Users can safely interact with this token while the main protocol remains insulated from unforeseen risks.
Benefits of Isolated Pools:
Borrowing and lending limits are tailored to the specific characteristics of the assets in the pool.
Flexibility for users to explore emerging or niche assets.
Robust risk management ensures security and reliability.