What are some of the differences between Artemis and Apollo?

Let’s begin with Artemis

Users will be able to deposit their assets into a reserve pool, thereby providing liquidity to each money market. In return, users will get interest-bearing zTokens which represent their deposited share of the pool in addition to a claim on interest earned from the pool. The total assets in the pool grows over time from interest earned from borrowing, where the interest earned will depend on the interest rate model of each asset. Users can deposit any amount into the pool with no lock up period.

Users will be able to borrow assets deposited into various money markets using their zTokens as collateral. The borrowers’ financing rate for each asset will depend on the interest rate model, which is a function of market demand and liquidity pool utilisation. Maximum borrowing amount is determined by users’ borrowing capacity. If the users’ total loan exceeds their borrowing capacity, their position may be liquidated to protect the protocol against systemic risk.

zkLend tokenises debt on the protocol with ERC20-compliant zTokens. Upon deposit, the depositor receives a corresponding amount of zTokens that maps the prevailing exchange rate relative to the underlying asset(s). The depositor receives a fixed number of zTokens with a floating exchange rate to the underlying asset that reflects interest accrued overtime. The zTokens represent claims on the deposit pools as well as a form of collateral determining borrowing capacities. In future iterations of the protocol, zTokens can be used in derivative product construction, such as debt obligations and credit swaps.

Borrowers will be able to leverage reserve pool liquidity without any collateral to exploit arbitrage opportunities in the market as the loan is paid back within the same block. Borrowers will pay a fee for their flash loan with the proceeds distributed evenly back to all liquidity providers of the pool they borrowed from. This feature will also be made available to institutional users through the Apollo protocol (where applicable).

High risk assets will be monitored more closely in case of price downturns to isolate market risk of these assets. Assets with similar risk characteristics may be segregated into separate categories with similar collateralisation ratios and interest rate curves. In addition, assets with high volatility may be restricted from being used as collateral, but only available for lending and borrowing. The protocol will review the assets periodically to determine whether they can move to become collateral.

What’s about Apollo?

The whitelisting layer ensures that only permissioned participants will be able to deposit and borrow from reserve pools. The whitelisting process typically includes legal compliance checks (KYC, KYB, AML and CFT), administrative onboarding procedures (understanding terms and conditions, fiat-to-crypto on ramping, due diligence) and technical procedures (providing permissions for the selected Ethereum wallet addresses).

Whitelisters will be responsible for the whitelisting process, separate from zkLend, with the necessary authorisation to duly conduct compliance checks, maintain relevant records and deploy standards required for permissioned users’ participation specific for each Apollo market deployment.

zkLend will decide on the regulator-approved and/or licensed whitelisters in the implementation of Apollo markets. However there are several factors considered in determining whitelister suitability, such as (but not limited to):

  • Whether they employ KYC, KYB and compliance standards in accordance, or to the same degree as FATF / local jurisdiction guidelines to identify and accept their users;
  • Robustness of their AML / CFT programs (if any); and
  • Reputation (licensed or otherwise) in their selected jurisdiction.

Further details of responsibilities and duties of whitelisters and zkLend protocol will be built out as Apollo is developed to ensure further risk control, adequate compliance standards, and oversight are implemented. zkLend will work closely with financial and legal advisors.

The institutional onboarding process comprises both on-chain and off-chain components. The off-chain component consists of working with regulator approved and/or industry recognized service providers for background and reference checks. The on-chain component includes cooperating with service providers on blockchain to handle whitelisting and custodian services.

Apollo will offer a ‘high touch’ and high client engagement approach. Dedicated institution and compliance team will engage with institutions to understand their product needs and compliance requirements prior to onboarding, provide onboarding guidance and liaise with various KYC/KYB service providers, custodians and whitesliters to streamline the process.

Whitelisted participants will be able to deposit their assets into each pool, thereby adding liquidity to each money market. Counterparties in the pools are whitelisted. In return, participants will receive corresponding zTokens representing their deposited share of the pool in addition to any interest earned from the pool. There is no lockup on assets deposited and any amount can be deposited into the pool. The interest earned will depend on the interest rate model of each specific asset. The scope of assets supported will be more limited than Artemis with an emphasis on short-tailed assets.

Institutional participants will be able to borrow in markets against other whitelisted addresses. Borrow rates will be determined by asset specific interest rate curves. Institutional participants will similarly have a borrowing capacity based on zToken balance and each asset collateral ratio.

If the participants’ total borrow exceeds their borrowing capacity, their position may be liquidated as a risk control management procedure to protect the protocol against systemic risk.

Institutional users will also be able to access Apollo’s flash loans.

Final comparison between Artemis and Apollo

Comparison of Artemis and Apollo by product feature.

About zkLend

zkLend is an L2 money-market protocol built on StarkNet, combining zk-rollup scalability, superior transaction speed, and cost-savings with Ethereum’s security. The protocol offers a dual solution: a permissioned and compliance-focused solution for institutional clients, and a permissionless service for DeFi users — all without sacrificing decentralisation.

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