There are three major issues with DeFi lending:
- Supplying & borrowing is an inefficient, multi-step process
- Only certain tokens can be used as collateral. Which requires borrowers to swap illiquid ERC20s just for the purpose of getting a loan.
- Transaction fees on Ethereum are notoriously high and high-volume lending activity can eat away at any earned yield.
Teller simplifies the lending process and makes it easier to access liquidity.
Due to market volatility, many lending protocols limit what tokens can be supplied as collateral.
The additional step of swapping a token into an “accepted” ERC20 to use as collateral introduces even more transaction fees and can result in slippage.
Not to mention the loss of utility from the original token (yield, governance, etc) can magnify missed opportunities.
On Teller, Supplying & Borrowing take place with one click.
Step 1: Select an asset as collateral (ANY ERC-20, ERC721, ERC1155)
Step 2: Type in the amount to borrow (USDC, DAI, USDT)
Step 3: Click Supply & Borrow
The collateral is deposited into an escrow vault while the loan amount (lending token) is transferred into the borrower's wallet in the same transaction.
How does it work?
Every loan on Teller is isolated within an order book.
So, a borrower deposits (supplies) collateral and receives a loan (with pre-set terms).
Liquidity (for each lending token) is aggregated into concentrated liquidity order books where loan requests are matched with suppliers. (Just like the stock market.)
This replaces price-based liquidation pools that rely on strict loan-to-value ratios, health factors, thresholds, and complicated algorithms.
Liquidity pools are at the mercy of market sentiment.
But, Teller order books allow even the most volatile crypto asset to be used as collateral because there is no risk of liquidation from price fluctuations.
A few things to note:
- Loan terms for one-click borrowing are based on pre-set conditions (determined by LPs and pool owners).
- Teller loans have flexible durations with fixed APRs
- Any change in collateral value does not trigger liquidation
- If a borrower makes the scheduled repayment, liquidation is impossible
Teller V2 is still in alpha. Limited access is available for select community partners:
📃 Teller V2 Docs – https://teller.gitbook.io/teller-lite/
🔒Github – https://github.com/teller-protocol
👾 Discord – https://discord.com/invite/teller
🐦 Twitter – https://twitter.com/useteller
🖥️ Teller App – https://alpha.lite.app.teller.org/