Backd Liquidation Protection

Recently I joined the bZx community call to talk about Backd. The Backd protocol deploys reactive liquidity pools that allow users to farm yield while simultaneously protecting their loans from liquidation. Backd will be launching on Ethereum mainnet in the following months. I am creating this thread to allow the bZx community to express their interests or concerns about Backd integration.

Here is short summary of what Backd integration would look like:
Collateral top ups would be supported for borrowers of the bZx ecosystem. Liquidity providers on Backd would be able to register their LP tokens to their loans or outstanding debt on bZx. This would benefit bZx borrowers by enabling them to earn interest with their idle assets while autonomously being protected from liquidation (Backd collateral top ups)

Looking forward to hearing any feedback!



Hi Max0x, welcome to the forum!

This certainly looks like a nice fit for borrowers on our platform, less risk of liquidation without providing unnecessary over-collateralisation. Happy to see you are considering bZx to be integrated!

Just curious, would this also work for our leveraged traders on Fulcrum, could they protect their trading positions as well with Backd?

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sounds great! im not that technical, but the idea to top up your collateral seems interesting and beneficial for the bzx ecosystem

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Hey! Sorry for the late reply.

Backd could, in the future, integrate with Fulcrum as well. However, considering Fulcrum’s architecture is different than that of Torque, I’m sure our devs would need to to have a chat.



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I think it would be beneficial as well! Thanks Steven

That would really be a big improvement over a CEX, there you would just leave your collateral in your future wallet just in case, but it’s not earning anything.

Imagine leverage trading on a DEX: when your trading positions are safe, your collateral isn’t needed and is earning sweet APRs via Backd. Then the market suddenly turns, Backd is returning your collateral and your positions are automatically saved!

Really worth investigating, it’s potentially a very big market (leveraged trading positions are per definition much bigger than 1x borrowing positions). Just saying… :wink: