# Avon

Avon brings true price discovery to onchain lending through the first Central Limit Order Book (CLOB) for DeFi credit markets. By enabling **lenders** and **borrowers** to set their own terms through open competition, Avon transforms lending from protocol-dictated rates to market-driven pricing.

[Website](https://www.avon.xyz/) | [Twitter](https://x.com/avon_xyz) | [Telegram](https://t.me/avon_xyz)

### What is Avon?

Avon is a **hybrid crypto lending system** built on MegaETH that combines order book-based lending with liquidity pools. Traditional DeFi lending has been stuck with deterministic interest rate curves since 2020, while TradFi evolved with real-time price discovery. Avon bridges this gap.

**Core Innovation:**

* **First onchain CLOB for lending** - True market-driven interest rates
* **Hybrid engine** - Combines order book matching with pool flexibility
* **Real price discovery** - Lenders compete, borrowers get options
* **Fixed and variable rates** - Choose open-ended or fixed-term lending

**Founded by:**

* **Prince** ([@im0xPrince](https://x.com/im0xPrince)) - Building Avon, first software engineer at Solflare

### How It Works

Avon's hybrid system provides flexibility for both active and passive participants:

**The Process:**

1. **Lenders deposit into curated pools** - Capital flows into pools managed by expert risk managers (e.g., Gauntlet, Re7)
2. **Pools post lending quotes onchain** - Managers publish offers to the order book with APY and LTV ranges
3. **Borrowers take or make orders** - Market Borrow for instant execution or Limit Borrow for preferred terms

**For Lenders:**

* **Passive earning** - Deposit into expert-curated pools, no management needed
* **Risk selection** - Choose pools by APY, risk profile, and curator reputation
* **Competitive yields** - Benefit from real market competition for rates
* **Precise control** - Active lenders can quote directly on the order book

**For Borrowers:**

* **Best aggregated rates** - CLOB finds optimal rates across all pools
* **Custom terms** - Set your own interest rate and LTV preferences
* **Instant liquidity** - Market orders execute immediately
* **Multi-pool matching** - Automatically distributes borrowing for lower costs

### Technical Architecture

**Why MegaETH is Essential:**

* **10ms blocks** - Real-time order matching and price updates
* **Unlimited gas** - Complex order-matching logic at scale
* **Sub-second execution** - Instant liquidations and settlements
* **High throughput** - Handle institutional-scale lending volume

**Order Book Design:**

* Multi-dimensional matching (interest rate, LTV, term)
* Price-time priority for fair execution
* Tick-based approach similar to Uniswap v3
* Aggregates liquidity from multiple sources

**Pool Integration:**

* Pools act as parameterized lending strategies
* Automatic requoting based on utilization
* Risk curators manage strategy execution
* Passive lenders benefit from active management

### Key Innovations vs Traditional DeFi Lending

**Traditional Pool-Based Lending:**

* Protocol-dictated interest rates
* No competition between lenders
* Limited customization options
* Passive-only participation

**Avon's CLOB Approach:**

* **Market-driven pricing** - Real competition determines rates
* **Custom loan terms** - Set your own parameters
* **Capital efficiency** - Better rates through aggregation
* **Flexible participation** - Active or passive strategies

**Why This Matters:** "We didn't choose AMMs because they were better. We chose them because there was no other choice... AMMs were never the way. It was a clever workaround for immature infrastructure." - [Prince](https://x.com/im0xPrince/status/1927345100050301081)

### Getting Started

**For Lenders (Earn):**

1. Browse curated pools by APY and risk profile
2. Deposit assets into chosen pools
3. Pool managers handle order book quoting
4. Earn variable APY based on utilization

**For Borrowers:**

1. Select borrow and collateral tokens
2. Choose Market Borrow for instant execution
3. Or place Limit Borrow orders for preferred rates
4. Manage positions through unified interface

**Key Features:**

* **Add to Queue** - Bundle multiple transactions
* **Multi-pool distribution** - Automatic rate optimization
* **Portfolio management** - Track all positions in one place
* **Flexible repayment** - Add/reduce collateral anytime

### Current Status & Supported Assets

**Initial Support:**

* Bluechip cryptocurrencies
* Major stablecoins
* Plans to expand to RWAs based on demand

**Security:**

* Best practices in smart contract development
* Thorough auditing before full launch
* Risk management by professional curators

### Resources

* **Technical Blog**: [Order Book-Based Lending](https://www.bedlamresear.ch/posts/ob-lending)
* [The Future of Onchain Credit Markets](https://x.com/avon_xyz/status/1887169777204166731)
* [Avon does not need market makers](https://x.com/im0xPrince/status/1981330633763766440)

***

**The Bottom Line:** Avon represents the evolution DeFi lending has been waiting for. By introducing true price discovery through a CLOB, Avon enables competitive rates that benefit both lenders and borrowers. This isn't just an incremental improvement - it's a fundamental shift from protocol-dictated rates to market-driven pricing. With MegaETH's infrastructure finally making this possible, Avon is building the future of onchain credit markets where efficiency, flexibility, and fair pricing are the standard, not the exception.
