Question 1

Is Avon a fixed-rate lending protocol because it has an order book?

Accepted Answer

No. Rates in Avon are always floating. The order book only shows liquidity levels for each strategy. When a borrower taps a level, they enter that strategy’s floating curve at that point, and the rate continues to evolve with utilization.

The order book coordinates access — it never locks the rate.

Question 2

What exactly is a “strategy”?

Accepted Answer

A strategy is an isolated lending market with its own interest curve, LTV rules, and liquidation model. It behaves independently from other strategies. Borrowers may have exposure across several strategies, but each portion follows the rules of the strategy that supplied it. Strategies define credit — the order book only surfaces them.

Question 3

Why would I borrow through Avon instead of other protocols?

Accepted Answer

Avon gives you the depth of pooled systems without forcing a single risk model. All liquidity is visible in one place, and you automatically receive the best terms, even if sourced from multiple strategies. You don’t need to search across markets, and you don’t inherit pooled risk.

Question 4

Why would a lender choose Avon?

Accepted Answer

Lenders choose exactly the risk they want. Liquidity never leaves the strategy it was deposited into, and no allocator redistributes funds. Yield comes only from borrowers in that specific strategy. Risk is isolated and yield calculations are transparent.

Question 5

If strategies are isolated, how does the market look unified to borrowers?

Accepted Answer

Strategies publish their liquidity levels to the order book. The order book displays all strategies at once, sorted by price and constraints. Borrowers interact with this single surface. Under the hood, the protocol records multiple independent components. This creates unified access without pooled risk.

Question 6

Can I get liquidated in one strategy but remain fine in another?

Accepted Answer

Yes. Health is checked per strategy, not across the entire position. If collateral falls, one component may be liquidated while others remain healthy. This behavior is intentional and protects lenders in markets unrelated to the one that becomes unhealthy. Borrowers should track their components individually.

Question 7

Does Avon rebalance or move liquidity between strategies?

Accepted Answer

No. Liquidity never moves unless the lender withdraws or redeposits. There are no allocators, no vault managers, and no automated rebalancers. Strategies are like separate markets connected only through the order book’s visibility layer. You always know where your funds are.

Question 8

How do rates move after I borrow?

Accepted Answer

Your rate moves according to the utilization of the strategy you entered. If liquidity inside that strategy gets borrowed, the rate increases. If borrowers repay, the rate falls. Each strategy’s curve defines this movement. Nothing global affects your rate except the conditions of the strategy you borrowed from.

Question 9

What makes a strategy “good” or “bad”?

Accepted Answer

Good strategies offer stable collateral, predictable curves, reasonable LTV, and liquidation rules that match market volatility. Bad strategies may use volatile collateral or offer LTVs that are too high. The benefit of Avon is that bad strategies do not affect good ones. Borrowers naturally route into competitive strategies. Poorly designed ones lose flow.

Question 10

How does Avon prevent the fragmentation that isolated markets normally cause?

Accepted Answer

Fragmentation happens when borrowers must manually search through many pools. Avon removes that friction by letting strategies publish their terms to a shared order book. Borrowers never choose pools. They borrow from the combined surface. Execution splits internally, but the experience stays unified.

Question 11

Why does Avon work only on high-throughput chains?

Accepted Answer

The order book needs to stay in sync with strategy state. When a borrower takes liquidity, utilization changes and the strategy updates its levels. On a slow chain, the order book would be stale. On a fast chain, it stays almost perfectly aligned with real conditions. MegaETH makes this architecture possible.

Question 12

Is Avon permissionless? Can anyone deploy a strategy?

Accepted Answer

Yes. Anyone can deploy a strategy with custom curves and rules. The system does not judge quality — borrowers and lenders do. Strategies compete on the order book, and markets gravitate to the best designs. Permissionless creation does not compromise isolation.

Question 13

How safe is it compared to pooled lending?

Accepted Answer

In pooled lending, one bad asset or parameter can contaminate the entire pool. In Avon, each strategy is isolated, so mistakes do not spread. Risk stays local, and users see it clearly before interacting. This significantly reduces systemic exposure.

Question 14

What happens if I borrow a large amount? Will the system split it?

Accepted Answer

Yes. If no single strategy can satisfy the full borrow size, the order book sources liquidity from multiple strategies in one transaction. The protocol tracks each component underneath. Splitting is automatic and transparent, giving borrowers deep liquidity without pooling.

Question 15

Can strategies be upgraded or changed?

Accepted Answer

Strategies cannot change their core structure. Interest curves are immutable, and only certain parameters can change through a timelock. Borrowers never face surprise curve shifts, and lenders know the strategy design remains stable. Predictability is a core design principle.

Frequently Asked Questions

Is Avon a fixed-rate lending protocol because it has an order book?

Is Avon a fixed-rate lending protocol because it has an order book?

What exactly is a “strategy”?

What exactly is a “strategy”?

Why would I borrow through Avon instead of other protocols?

Why would I borrow through Avon instead of other protocols?

Why would a lender choose Avon?

Why would a lender choose Avon?

If strategies are isolated, how does the market look unified to borrowers?

If strategies are isolated, how does the market look unified to borrowers?

Can I get liquidated in one strategy but remain fine in another?

Can I get liquidated in one strategy but remain fine in another?

Does Avon rebalance or move liquidity between strategies?

Does Avon rebalance or move liquidity between strategies?

How do rates move after I borrow?

How do rates move after I borrow?

What makes a strategy “good” or “bad”?

What makes a strategy “good” or “bad”?

How does Avon prevent the fragmentation that isolated markets normally cause?

How does Avon prevent the fragmentation that isolated markets normally cause?

Why does Avon work only on high-throughput chains?

Why does Avon work only on high-throughput chains?

Is Avon permissionless? Can anyone deploy a strategy?

Is Avon permissionless? Can anyone deploy a strategy?

How safe is it compared to pooled lending?

How safe is it compared to pooled lending?

What happens if I borrow a large amount? Will the system split it?

What happens if I borrow a large amount? Will the system split it?

Can strategies be upgraded or changed?

Can strategies be upgraded or changed?