Ajna Finance: DeFi Without Oracles
The ancient teachings of the Ajna Chakras hold a belief that activating these energy centers can unlock the true potential of the human mind. Today, this timeless concept finds resonance in Ajna Finance, a cutting-edge protocol aiming to revolutionize DeFi. With a mission to unleash untapped possibilities for on-chain lending and borrowing, Ajna Finance sets itself apart from the rest. Founded by a group of visionaries, including former MakerDAO alum, this lending platform proudly presents a unique approach: a world of boundless opportunities for users, devoid of permissions, price feeds, and even governance.
So, how does Ajna Protocol work?
How Ajna Protocol Works
Ajna Protocol operates on a peer-to-pool concept, which means that lenders supply to and borrowers take from pools of assets. Users of the protocol can permissionlessly create pools for any asset with lending terms managed by the protocol’s rules. The prices of these assets are measured not by price feeds but by lenders. Loans on the platform are perpetual by nature and never expire. Supply and demand affect the variable interest rate for each pool. Importantly, with no protocol governance, Ajna exists as an immutable set of smart contracts that cannot be changed.
Pools All the Way Down
Perhaps most important is the ability for any user to create pools for ANY collateral or quote token asset pairing (including NFTs).
With oracles and governance out of the picture, collateral of all types are made accessible.
Burn Baby, Burn!
Each pool accumulates reserves from Origination Fees, Deposit Penalties, and Net Interest Margin on pool loans.
These are then sold in “Reserve Auctions”, where users can buy the pool’s underlying quote token with AJNA tokens. Thereby, burning AJNA and reducing the total token supply in the process.
With no minting function, the total supply of AJNA can only decrease with time.
Oracle-free since 23’
I’ll dive into this one more below. It's a hot topic.
Get in Anon, we’re Funding Grants
I’ll let you in on a secret..there is still a little governance, just not in the core protocol.
Ajna does not rely on external price feeds like other blue-chip lending protocols such as Aave and Compound. By avoiding oracles, Ajna mitigates the risk of external points of failure. Price oracles are often used across DeFi protocols to enable real-time price data for the trading of onchain assets. However, their implementation is a recurring hot topic in the space. Protocols such as Panoptic, Blur, Ethereum Credit Guild (fka Volt Protocol), and Ajna are among a new guard of DeFi protocols claiming to work more effectively without oracles. Using oracles comes with a cost just as much as a benefit. They can introduce potential attack vectors and single points of failure, as witnessed in the past with various notorious exploits in the DeFi space. They also limit the asset universe of lending markets to assets with liquid secondary markets, which many crypto assets do not have. Where oracles do help is in providing accurate and real-time price data, which is essential for certain trading and lending activities. However, Ajna Protocol solves this issue by letting lenders themselves determine the price of assets in their pools. This approach has been called “bring your own oracle”.
With a little Future-Proofing Built-In
Another unique aspect of Ajna is how it supports its own success through grants. With no protocol-level governance, Ajna’s collective decision-making duties come in the form of a “built-in” grants program. Grants aim to fund initiatives, projects, and builders contributing to the growth and development of the Ajna ecosystem. We at StableLab are encouraging Development, Marketing, Research, and Integration related proposals.
The Grants Program
Grant Distribution - Every 90 Days
Each quarter, a portion (up to 3%) of the treasury (30% of the total token supply) is allocated for distribution.
Screening Stage - 73 Days
Any interested party can submit a formal proposal for funding.
AJNA tokenholders can delegate voting power to themselves or any other party.
Uses 1 token = 1 vote
Funding Stage - 10 Days
The top 10 proposals from the screening stage advance to the funding stage where they receive positive or negative votes
Votes count in a quadratic manner; Meaning the number of voting credits they have increases with the number of proposals they vote on.
Challenge Stage - 7 Days
After the Funding Stage ends there is a one-week challenge period.
Alternative sets of winning proposals can be submitted.
The optimal batch of proposals is chosen based on the net number of votes and budget constraints.
Winning proposals claim funding.
10% of the distribution is awarded across qualifying delegates.
Joining the Ajna Community
At StableLab, community involvement and development are at the core of our values. That is why we are thrilled to announce our participation as delegates in the Ajna community, where we will play a crucial role in guiding the oracle-free protocol's evolution. The timing couldn't be more perfect, as Ajna undergoes code audits and prepares for its full Ethereum mainnet launch later this year. We invite you to join us in the Ajna community discord and discussion forums, where together we can actively contribute to the decentralization of the protocol and collectively shape its bright and promising future.