Isolated Markets

Isolated markets are specialized lending markets designed to securely introduce new or higher-risk assets without impacting the overall stability of the protocol. They’re ideal for users looking to supply to non-traditional assets or those with higher volatility, while maintaining a safe and reliable ecosystem.

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How They Work:

• Each isolated market operates independently of the main lending market.

• Risks (e.g., price volatility or liquidity concerns) are confined to the specific market.

• Any issues in one market (defaults, liquidations) do not affect the protocol's core assets or broader markets.

• When supplying to an isolated market, the position becomes isolated, meaning you can't supply to other markets with that position, and borrow only from selected markets.

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Use Case Example:

• A new or experimental token is added as an isolated market.

• Users can safely interact with this token while the main protocol remains insulated from unforeseen risks.

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Benefits of Isolated Markets:

• Supply limits are tailored to the specific characteristics of the assets in the market.

• Flexibility for users to explore emerging or niche assets.

• Robust risk management ensures security and reliability.