Token Qualification Criteria
Osito uses objective, programmatically verifiable criteria to determine if a token can be used as collateral, eliminating the need for subjective governance decisions.
Initial Focus: Panda & Ramen Tokens
Osito Protocol initially supports tokens deployed by two trusted factories:
- Panda Factory - Verified using
isLegitPool()function - Ramen - Verified using
isLegitPool()function
A token must pass the deployer verification check before the protocol will consider its other properties. This provides a first layer of security against arbitrary tokens.
The Two Key Requirements
1. Verified Deployer
The token must be deployed by either Panda Factory or Ramen, which are trusted deployers.
Why This Matters:
These deployers are whitelisted because they ensure tokens have a verifiably fixed supply with mint and freeze authorities disabled. On-chain verification of fixed supply is impossible with ERC20 unless the deployer is trusted.
2. Burned LP Tokens
A portion of the token's Kodiak liquidity pool tokens must be verifiably burned (sent to the burn address).
Why This Matters:
Burned LP tokens establish a permanent liquidity floor that can't be removed, allowing the protocol to safely calculate lending limits based on worst-case token dumps.
No Subjective Assessments
These criteria are verified purely through on-chain code, with no governance votes or subjective decisions. If a token meets these criteria, it can be used as collateral immediately.
Verification Process
- Check Token Deployer
The protocol calls
isLegitPool()on both Panda Factory and Ramen. If neither returns true, the token is rejected. - Find LP Token
The protocol locates the Kodiak LP token for the token-wBERA pair.
- Verify Burned LP
The protocol checks the LP token balance at the burn address (0x000...dEaD). If the balance is zero, the token is rejected.
Automated Verification:
All verification happens automatically on-chain in real-time. There is no manual review, whitelist, or governance process. Each token is either eligible or not based solely on these objective criteria.
Mathematical Safety Model
When a token meets these criteria, Osito calculates its maximum borrowing limit using the formula:
max_borrow = pool_wBERA - (pool_wBERA * pool_tokens) / (pool_tokens + dumpable_tokens)This formula simulates a worst-case scenario where all circulating tokens are sold into the pool at once, ensuring the protocol always remains solvent regardless of token price movements.
Benefits of This Approach
Permissionless
Any qualifying token from the supported factories can be used immediately without approval.
Governance-Free
No governance votes needed to add new collateral types, eliminating centralized decisions.
Mathematically Sound
All lending limits are derived from objectively verifiable on-chain data.