Architecture

Sweep Protocol works like a decentralized bank

Liabilities

Borrowers mint SWEEP coins as a liability. The protocol charges interest by moving USD target price for repayment. SWEEP is sold and redeemed in AMMs, such as a Balancer stable pool on Arbitrum. The SWEEP coin moves through LayerZero and AMM arbitrage to link multiple chains in a single money market.

Assets

Sweep funds collateralized lending through vaults called Stabilizers. Stabilizers have standard parameters for equity (also known as margin collateral or junior tranche), call terms, and fees. They have customized code to invest, divest, and price the assets they contain.

Sweep stabilizers support a wide range of collateral

• DeFi strategies. With distribution to multiple chains, Sweep protocol has the tools seek the best risk-adjusted rewards in the blockchain ecosystem

• Tokenized securities. They provide qualified borrowers, and they can allow up to seven days to settle a trade

• Commercial loans with collateral agents that represent the lending pool

The protocol promises to be able to return all assets within seven days. Over time the protocol should be able to provide longer-duration, more useful money.

Decentralization

The protocol can decentralize by pushing responsibilities to borrowers. Each stabilizer vault is controlled by a single borrower. The borrower is responsible for providing junior tranche capital, qualifying to buy securities or other assets, making allocations, and harvesting rewards. Sweep gives users a simple process to design a new asset Stabilizer and propose it to receive a loan allocation.

Components

Stabilizers are smart contracts for collateralized lending and borrowing. DeFi protocols can use Stabilizers to place money into DeFi strategies, off-chain lending, and securities. Each Stabilizer is controlled by an expert wholesale borrower that provides capital.

Decentralized banking

A move from local markets to global markets is changing banking. It separates liabilities from assets.