Picasso and Basilisk Partner and Form Joint Venture to Develop Angular Finance — A Premier Lending Protocol on Kusama

The Composable Finance and HydraDX teams have partnered in a joint venture to build out Angular Finance, an isolated lending pair protocol built on Substrate. Our ultimate visions all align: the unique features of Substrate enable the creation of a vibrant DeFi ecosystem. Furthermore, we believe that Kusama will see growth rivaling that of other ecosystems, particularly as a variety of protocols are just starting to emerge.

The era of permissionless finance has only just begun. The future is composable and pluggable money legos. We’re looking to bring users a true seamless and cheap cross-chain experience. Frictionless liquidity must underpin the most advanced lending use cases

Jakub Gregus, co-founder of HydraDX

It is with these core beliefs that we have joined forces to build out Angular Finance, the project Composable Labs is incubating, as previously announced.

The mission of this collaboration is as follows:

1. Angular Finance will be an isolated lending pair pallet for the Kusama ecosystem. This will offer all of the functionality of standard lending pairs in DeFi, which pool any two assets and allow users to use one of these digital assets as collateral to take out a loan in the form of the other asset. Classic examples of this pool-based lending are Aave and Compound. However, Angular Finance’s lending pairs will have the added benefit of risk isolation. Thus, instead of borrowers having to take on the risk of the entire platform (such as in Aave and Compound), they will only be exposed to the risk of the assets involved in the pool they are participating in themselves. This means that a risk-averse user can opt to participate only in pools with lower risk, while a more risk-tolerant user can choose the opportunities that may be riskier but also have the potential for higher rewards.

Angular further caters to its users by allowing anyone to create an isolated lending pair between any digital assets. An important opportunity arising from this is that users can create pools for very unique or niche assets. This opens up the ability to leverage or short assets that would not otherwise likely be available as collateral in pool-based protocols, such as interest bearing assets, derivatives, liquidity provider tokens, etc.

We believe that to support the fast-moving and creative spirit of the Kusama ecosystem, a protocol like Angular is a necessary primitive in order to allow other teams to build and experiment with further DeFi primitives that utilize leverage. Developers building on the Picasso parachain can compose Angular with our other pallet offerings, including Apollo (our MEV-resistant oracle pallet) and Cubic (our vaults pallet) to create optimized dApps with these building blocks.

2. Angular will be deployed as a pallet on the Picasso Kusama parachain, and remain there unless governance votes to upgrade it to Polkadot. However, the intention is that Angular becomes the de facto leverage vehicle for all assets, staking activities, and liquidity provisioning in the Kusama ecosystem. The pallet will leverage Cubic, the Picasso vaults pallet, to allow for the seamless cross-chain movements of liquidity across the Kusama ecosystem. Furthermore, the pallet will utilize Apollo, the oracle pallet on Picasso, in order to obtain MEV-resistant price information for the assets that will be listed for collateral on Angular.

3. Basilisk will be the foremost automated market maker (AMM) in the Kusama ecosystem. The team has embedded several unique features into their AMM that leverage the functionalities of Substrate. For instance, Composable will collaborate on the work the HydraDX team has been spearheading with regards to liquidations. These will power the maintenance of a high health factor for the Angular Finance system, leveraging cross-chain message passing (XCM) to utilize the Basilisk AMM to liquidate undercollateralized loans. Additionally, with the advent of liquidity provisioning in the Kusama ecosystem being furthered by Basilisk, being able to obtain leverage on this activity will fuel the ecosystem, and attract users/capital allocators that want to take part in furnishing the liquidity of this nascent ecosystem.

Use Cases:

Applications leveraging Angular can include leveraged staking, derivatives trading, arbitrage, and liquidity providing, among other essential DeFi use cases. The possibilities are endless, and would all utilize Angular as the main source of cyclical collateral and leverage. This will effectively level up a standard dApp offering, by enabling developers to create new and improved value-generating opportunities within the Polkadot ecosystem.

Near-Term Goals:

The hope is that through this initial collaboration, we will be able to launch Angular Finance before the end of Q4 2021. This would enable the creation of several additional primitives we hope to create, as our two groups continue to collaborate.

Our two groups are excited to continue working together, in collaboration with the Angular team, to push forward the project’s roadmap. The Angular team presently consists of a CEO and Head of Product, and over time plans to hire in-house full-time team members to facilitate the quality execution of Angular’s vision.

Next Steps:

We are excited to begin collaborating immediately on the vision for Angular Finance. We will keep the community informed as to our upcoming endeavors and progress.

More about Basilisk:

Basilisk is a project created by HydraDX, a cross-chain liquidity protocol built on Substrate. Basilisk is its liquidity bootstrapping protocol built for Kusama. HydraDX describes Basilisk as “a natural stepping stone on [their] journey of building the liquidity infrastructure of the future. This plan will eventually culminate in the HydraDX Omnipool which is intended to operate as a Polkadot parachain in order to enable frictionless liquidity for any asset on any chain.”

Basilisk was built upon HydraDX’s experience in carrying out the most successful liquidity bootstrapping pool (LBP). LBPs are essential in the early stages of a DeFi project to ensure they start off with the necessary liquidity to properly and smoothly operate, before the ecosystem can grow to a point where it can sustain its own liquidity needs. Through this experience, HydraDX determined the most critical part of an LBP is achieving meaningful distribution while bootstrapping sufficient liquidity.

Thus, Basilisk was created as a liquidity bootstrapping protocol for the deployment of new crypto projects. Basilisk allows the projects using it to bootstrap liquidity with the AMM model that best suits their needs, ensuring an optimal transition to self-sufficiency.

More about Composable’s Kusama Parachain, Picasso:

As we have previously announced, the ultimate vision for our Picasso parachain is to create a rich, composable DeFi ecosystem on Kusama. We facilitate this with both Composable-built and user-built Substrate pallets, which will encompass all tools involved in DeFi from the most basic primitives to the most complicated applications. Users can vote upon which of these pallets to implement into our ecosystem, ensuring that our offering meets their needs. Thus, developers will be able to use our pallets as LEGO-like building blocks to create any dApp they can dream up.

We are eager to add the Angular isolated lending pool pallet to this platform, as we are certain it will serve as a critical piece of many of the applications built along our parachain, and give way to ample innovation and value generation.

For more information about Composable and how it is architecting the unified DeFi landscape of the future, check out our socials:

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