Frequently Asked Questions

General Questions

What is Osito Protocol?

Osito Protocol is a lending protocol on Berachain that allows borrowing against eligible tokens without relying on oracles, governance, or price feeds. It uses a mathematical model based on AMM pool data to determine safe lending limits.

How is Osito different from other lending protocols?

Unlike traditional lending protocols that use oracles and governance to determine collateral value, Osito calculates borrowing limits using on-chain AMM data and a mathematical formula that ensures protocol solvency. This approach eliminates oracle risk, governance risk, and allows immediate permissionless integration of eligible tokens.

Why is it called "Osito"?

"Osito" means "little bear" in Spanish, a playful reference to Berachain where the protocol is deployed.

Tokens and Eligibility

Which tokens can be used in Osito Protocol?

Any token that meets two objective criteria:

  1. Fixed supply (deployed by Panda Factory or Ramen)
  2. Verifiably burned LP tokens in a Kodiak pool with wBERA

How do I know if my token is eligible?

You can check through:

  1. The Osito dApp, which only shows eligible tokens
  2. Calling OsitoToken.isEligibleToken(tokenAddress) directly
  3. Checking the Osito token explorer

How can I make my token eligible?

Deploy your token using Panda Factory or Ramen with a fixed supply, create a liquidity pool with wBERA on Kodiak, and burn some LP tokens by sending them to the dead address: 0x000000000000000000000000000000000000dEaD.

Are there minimum liquidity requirements?

There's no fixed minimum liquidity requirement, but tokens with deeper liquidity will support higher borrowing limits according to the formula. Additionally, a minimum amount of LP tokens must be verifiably burned.

Borrowing and Collateral

How much can I borrow against my tokens?

The borrowing limit is calculated by:

  1. Token's global max borrow: pool_BERA - (pool_BERA * pool_tokens) / (pool_tokens + dumpable_tokens)
  2. Your position's share: (tokens in position / total tokens deposited) * token max borrow

This amount updates dynamically based on market conditions and other users' actions.

Why did my borrowing limit change?

Your borrowing limit can change due to:

  1. Changes in the token's liquidity pool (depth, composition)
  2. Increased protocol utilization of the token
  3. Changes in circulating supply
  4. More users depositing the same token (diluting your share)

Can my position be liquidated?

Yes, if your borrowed amount exceeds your position's maximum borrowing capacity. This can happen due to interest accrual, increased token utilization, or liquidity changes. To avoid liquidation, maintain a safety buffer, monitor utilization, and repay loans regularly.

What happens during liquidation?

In a liquidation:

  1. A liquidator repays your entire debt
  2. The liquidator receives all your collateral
  3. Your position is closed entirely

Osito uses an "all-or-nothing" liquidation approach rather than partial liquidations.

Lending and Staking

How much interest can I earn by lending BERA?

Interest rates scale with utilization:

  • 0% utilization: 0% APR
  • 90% utilization: 50% APR
  • 100% utilization: 10,000% APR

The actual rate depends on how much BERA is borrowed relative to how much is supplied.

What happens if I try to withdraw BERA when utilization is high?

You can withdraw BERA up to the point where total borrowed = total supplied. If you try to withdraw more, the transaction will revert. In high utilization scenarios, interest rates increase dramatically, incentivizing borrowers to repay and/or new lenders to deposit.

What rewards do I get for staking tokens?

Token stakers earn yield generated from the protocol's fee on interest payments. The specific yield depends on the token's utilization in the protocol and total amount staked.

Why would I stake tokens instead of depositing them as collateral?

Staking is ideal if you want to:

  1. Earn yield without taking on debt risk
  2. Support the token's utility in the protocol
  3. Avoid the complexity of managing a borrowing position
  4. Help increase the token's global borrowing capacity

Technical Questions

Is Osito Protocol audited?

Yes, Osito Protocol has undergone comprehensive security audits by [Audit Firm Name]. The audit reports are available in the references section of the documentation.

Can the protocol be upgraded or changed?

No, Osito Protocol is fully immutable. There are no admin keys, upgradeability, or governance mechanisms. All parameters are mathematically derived, ensuring the protocol operates exactly as designed forever.

How does Osito calculate interest rates?

Osito uses a dual-component interest rate model that combines BERA utilization and token-specific factors. The rate curve has two slopes: a gentle increase up to 90% utilization (reaching 50% APR), then a steep increase to 10,000% APR at 100% utilization.

How often is interest calculated?

Interest accrues continuously but is calculated and applied at the time of interaction with the protocol. Osito uses an index-based approach where global accumulator indices track interest over time, and position updates apply accumulated interest only when users interact.

How does Osito ensure it remains solvent?

Osito ensures solvency by:

  1. Calculating maximum borrowing limits based on worst-case scenarios
  2. Using just-in-time data fetching to always use current market conditions
  3. Implementing all-or-nothing liquidations to quickly resolve undercollateralized positions
  4. Maintaining a mathematical model that guarantees BERA lenders can always be made whole

Integration and Development

How can I integrate Osito into my dApp?

Osito Protocol can be integrated through direct contract interactions. See the Integration Guide in the Developer Resources section for detailed instructions.

Are there SDKs or APIs available?

Yes, Osito provides JavaScript/TypeScript libraries for frontend integration. The SDK documentation is available in the Developer Resources section.

Can I build on top of Osito Protocol?

Absolutely! Osito is designed to be composable and can serve as infrastructure for other DeFi applications. Since there's no governance risk or upgradeability, you can build with confidence that the protocol's behavior won't change.

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