Parties

Borrowers

Borrowers are anyone who deposits collateral into a Vault to borrow SALT.

These will be the traditional borrowers that occur on other lending or CDP platforms. Their motivations will be similar in borrowing in that they may be desiring to leverage up their exposure to their underlying collateral. The advantage of the Sodium Protocol is that due to the liquidation mechanism, the interest charged to account for default risk is minimal and users could essentially borrow for free.

Another type of borrower could be yield farmers that want to leverage up their yield on an LP position.

Another type of vault user would be peg arbitrageurs. If SALT is trading significantly above par with the USD, it could be advantageous for someone to deposit collateral and mint SALT to sell in the liquidity pools and then buy back ETH at a discount.

Depositors in the SALT Pool

There is huge value in the SALT pool as its yield is derived from the liquidations of borrowers which should provide a negatively correlated return to other asset allocations.

Anyone looking to gain exposure to such an asset class

Liquidity Providers in the ETH-SALT liquidity Pools

Swappers using the Liquidity Pool

The liquidation bot selling collateral back into SALT (Buying SALT)

Asset allocators looking for exposure to the negatively correlated SALT pool (Buying SALT)

When SALT is above peg, people may choose to mint SALT in the vault and sell it in the pool to buy back their collateral. (Seling SALT)

Borrowers looking to leverage exposure to ETH or use it elsewhere in DeFi (Selling SALT)