On March 26, the decentralized exchange SushiSwap officially announced that its one-click leveraged lending product Kashi was officially launched. This is also the first lending solution launched by its token library BentoBox.

According to reports, in the process of optimizing the token library BentoBox, the development team found that separating BentoBox and Kashi would produce better results. Users who have just heard of this new product can understand in the following why the splitting of the two has more obvious advantages, and how Kashi made revolutionary innovations on Layer1.

Before going into the details, let’s first introduce the internal connection between BentoBox and the Dapps that will be built on top of it. BentoBox is a token library, like a decentralized application store that drives other Dapps by storing token assets. Kashi is the first Dapp on BentoBox, and it is also a margin trading platform driven by lending agreements. It allows users to create a loan portfolio within the scope of their expected returns that can be optimized.

This means that many tokens that could not be shorted before can now be opened to traders through Kashi.

1. What is the operating mechanism of Kashi?

BentoBox is a token library that securely stores many tokens, and can generate investment income through lightning loans and strategic agreements built on it. Kashi also means borrowing in Japanese, and it is built on BentoBox.

Their specific division of labor is that BentoBox is responsible for storing tokens and Kashi uses these assets to carry out lending business. It is worth mentioning that Kashi is a one-click leveraged transaction, which supports users to buy long/short with one-click leverage (up to 2 times). The clearing of a single transaction pair will not affect other transaction pairs and induce global clearing risks. The flexible interest rate is adjusted according to supply and demand. For Kashi, BentoBox plays the role of an asset wallet, and is separate from externally owned wallets, which reduces transaction time and costs while allowing simultaneous use of your token assets.

In the built-in AMM, the user's assets in BentoBox can be used to provide lightning loans. This can bring additional benefits to users. Specifically, even if the asset has not been lent, the user can still deposit the asset to earn investment income or commission commission on the SushiSwap exchange, which makes the user's asset not idle in the form of opportunity cost. BentoBox also adopted the following two measures to maximize the utilization rate and profitability of users' digital assets.

2.users are already excited

At the beginning, users only need to add a set of loan transaction combinations, which is equivalent to inputting liquidity for the trading platform. In the future, in addition to assets and collateral, users need to choose different oracles based on the types of assets they have lent. Therefore, the user's loan transaction portfolio looks more like a loan oracle.

In addition, users can create a loan portfolio on Kashi in less than 5 minutes. In Kashi's V2 version, users only need to add assets to the BentoBox token library, then select the assets they are willing to lend and the collateral that needs to be provided, and then select the oracle. The collateral selected by the user is not allowed to be lent, and the oracle is used to provide data on the current price of the collateral to the asset. Choosing an oracle may make users feel a little confused, so it is recommended that professionals intervene.

In the V1 version of Kashi's loan transaction solution, the current capital interest rate parameter will be controlled at 70%-80%, and the loan interest rate is flexible. Different parameters may also be used later. This also means that at any given time, 70% of assets will be used for lightning lending. If the utilization rate is below 70%, the assets in Kashi will not create financial value, and the industry cannot regard it as a loan portfolio that can generate a lot of investment income. So it is naturally conceivable that Kashi users will withdraw their money from the lending position in this case.