Risk Framework

Money market protocols often adopt two main structures for their lending pools:

• Shared pools: Protocols like Aave and Compound allow any type of approved collateral asset to be used to borrow any token from the same account. The benefit of this approach is the efficient use of onboarded collaterals at the expense of the solvency risk. If one of the collaterals crashes, the effect propagates to all assets within the protocol.

• Isolated pools: protocols like Kashi and Rari create specific markets where only a certain set of collaterals can be used to borrow only a certain set of tokens. If any collateral crashes, the insolvency risk is limited to the specific market (pool) in which the collateral is listed. This approach is more conservative in terms of risk management but it creates more fragmentation and can lead to thin lending pools that don't work efficiently.

The two structures have different purposes and work best with different sets of assets. For instance, shared pools are the perfect environment for blue chip collaterals such as ETH, whereas isolated pools are more suited for the long tail of assets.

RelDeFi Finance Market's design is different from the above approach. RelBank gives you an easy way to borrow loans on Non-moveable properties without the hassles of traditional paperwork.

RelDefi provides $RLDF holders to provide liquidity to RelBank. This fund is then given as a loan to the borrower only for Non-moveable properties with collateral to RelBank. Borrower loan repayments are directly transferred to lenders( $RLDF liquidity providers)