Permissionless Tranches

Permissionless lending pools opened up a new wave of decentralized lending. Allowing anyone to permissionlessly deploy an isolated lending market, with support for any asset, unlocked more open borrowing and lending opportunities. However, despite the positive opportunities ushered in by permissionless lending markets, it became evident that their fully permissionless nature allowed for excessive mismanagement of pool risk by administrators.

Through the use of permissionless tranches, VMEX aims to create open borrowing and lending markets for DeFi participants and protocols while providing the necessary tools and structure needed to manage lending market risk.

To ensure market safety, when users create a permissionless tranche on VMEX, they opt into the VMEX risk management framework. VMEX's risk framework requires that all assets in a permissionless tranche meet basic asset criteria. If they are not already approved, they must be submitted for approval via a request form. Additionally, all asset specific risk parameters, such as LTV, interest rate curves, liquidation penalties & thresholds, etc. are preset by VMEX, using VMEX’s asset risk assesment tools

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