⚙️How it Works

Nashed: Itos Producer

Nashed is an Itos Producer, meaning it ascribes to the Itos Position Manager's Producer interface and gets to use its cross-margining capabilities.

As a smart contract, Nashed is actually incredibly simple. It just issues credit positions and debts positions for lends and borrows respectively, nothing more complicated than that.

The secure borrows and the transmute positions are bundle positions. They're combinations with Itos Takers.

Itos Takers as Liquidation Insurance

Itos 2sAMM's Takers are convex positions that pay a funding rate to always trade into the more valuable of the token pair. More details are available in Automated Market Taking.

Takers combined with a deposit guarantee a minimum balance in the other token of the Taker's token pair. That minimum balance is the max amount a user can safely borrow without fear of liquidation.

The Total Value of a secure borrow is never below zero

Itos PM Accounting

The Nashed liquidation and solvency rules are actually the Itos PM's rules which are extensive, tested, and well-motivated. (See Whitepaper for exact details).

They ensure that all blue-chip debts and credits are cross-margined while the isolated debts and credits individually solvent. The bundles Nashed uses to create the advanced positions have their token balances netted out which improves capital efficiency as opposed to directly using the PM.