Backstop AMM (BAMM)

A robust DeFi liquidation engine primitive.

Yaron Velner presents B.Protocol's liquidation engine (v1)

Intro

B.Protocol provides a Backstop AMM (BAMM) DeFi primitive, providing better stability, and unlocking higher capital efficiency in the DeFi ecosystem. By democratizing liquidation systems we shift MEV and bots' profits to the community.

High-Level System Design

B.Protocol pools users’ funds into Backstop pools. This liquidity is used for liquidations as they happen on integrated platforms. While the Backstop funds are sitting idle in the pools waiting for liquidation to occur, they gain either interest rates or liquidity mining rewards, or both, generating passive revenue for the Backstoppers - users who provide liquidity to the Backstop pools.

Once a liquidation takes place, the Backstop AMM (B.AMM) smart contract pulls the needed funds from the backstop to facilitate the liquidation and automatically puts the seized collateral for sale. Once sold, the return is deposited back to the backstop pool, and profits are accrued.

B.Protocol's Backstop AMM High-Level System Design (B.AMM)

Here's a (recap of the) call we had with the Liquity team after the launch of B.Protocol v2 integration with Liquity, summarizing the benefits of using the B.AMM for automatic rebalancing after liquidations (the recording of the full call can be watched here - https://youtu.be/t81WxsStfD4?t=52) -

An interview with CRE8R DAO covering the inception and making of B.Protocol, liquidations in DeFi, the benefits of using B.Protocol, and more -

For a more updated review of B.Protocol v2 and the User-Based Backstop, you can watch this interview of Eitan Katchka, Head of Growth at B.Protocol on the FTM Alerts show.