Introduction

What is V2 Protocol

V2 protocol is a decentralized non-custodial ERC20 & ERC721 liquidity and lending protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an over-collateralized (perpetually) using ERC20 & ERC721 as collateral.

The following documentation describes the fundamentals of the protocol and how to interact with it. Please join the #development room in the BendDAO community Discord server; our team and members of the community look forward to helping you build on top of Bend.

The protocol is implemented as a set of smart contracts on top of the Ethereum blockchain. Smart contracts guarantee safety and do not require an intermediary agent.

Architecture Overview

V2 Protocol use singleton architecture to support multiple pools. Unlike protocols like Aave or Compound, positions in V2 are not tokenized as aTokens or cTokens. Instead, they are tracked using a mapping at the singleton smart contract level. This approach simplifies the system and reduces dependency on ERC20 token standards, offering a more efficient way to manage user positions.

In order to make the smart contracts easy to maintain, the V2 protocol achieves high cohesion and low coupling through libraries and modules.