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.
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) - Building Avon, first software engineer at Solflare
How It Works
Avon's hybrid system provides flexibility for both active and passive participants:
The Process:
Lenders deposit into curated pools - Capital flows into pools managed by expert risk managers (e.g., Gauntlet, Re7)
Pools post lending quotes onchain - Managers publish offers to the order book with APY and LTV ranges
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
Getting Started
For Lenders (Earn):
Browse curated pools by APY and risk profile
Deposit assets into chosen pools
Pool managers handle order book quoting
Earn variable APY based on utilization
For Borrowers:
Select borrow and collateral tokens
Choose Market Borrow for instant execution
Or place Limit Borrow orders for preferred rates
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
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.
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