How Tos

Base's Hot New DeFi App

How to get started with Astaria protocol on Base.
Mar 11, 20244 min read

Base continues to be a growing DeFi hot spot, and Astaria v1, which launched in early 2024, is a rising star on the network.

Astaria is a lending protocol that eliminates the need for oracles and introduces an intent-based, fixed-rate lending system with unlimited loan durations. This innovative setup has caught crypto's attention thanks to the dapp's simplicity and overall user experience.

Today, we dig into how Astaria works, how you can use it, and why people are excited👇

How Astaria works

Astaria is built on the Starport protocol, serving as its backbone. This foundation allows Astaria to operate without oracles, using a mechanism known as intents

In the context of Astaria, intents are essentially loan agreement proposals that borrowers and lenders create to express their lending or borrowing conditions. 

This system facilitates a more flexible UX, setting Astaria apart from its competitors by allowing for complete risk isolation and supporting an endless variety of asset pairs from day one.

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How to use Astaria

To dive into Astaria, you’ll need to have some assets on Base. Astaria opens the door for using a range of assets as collateral for borrowing, from ERC20 tokens to NFTs, or providing loans in the form of stablecoins like USDC or via other ERC20 tokens. Keep in mind that the DEGEN market is currently enjoying the highest average APY on the protocol (+400%). 

How to borrow on Astaria

Astaria v1 borrow intents are timed auctions where borrowers offer their proposed loan terms. Borrowing on Astaria starts with publishing an intent. Here's how it works:

  • ✍️ Creating an intent — Input your loan offer into the “Borrow” interface of the Astaria app and then sign the ensuing offchain EIP-712 message to publish it. Note that this step is free of gas fees, and the likelihood of your intent being filled increases with lower loan-to-value (LTV) and higher interest rates.
  • 🛒 Entering the auction period — The intent enters the Intent Feed for a 24-hour auction, starting at 0% interest and potentially rising to the max rate set by the borrower. Borrowers can cancel their intent if it's not yet filled.
  • 🪙 Loan execution and management — Upon acceptance by a lender, the loan automatically executes, transferring the collateral and funds between parties. Borrowers can repay the loan at any point, and after a 24-hour honeymoon period, lenders may initiate a recall auction if desired.

How to lend on Astaria

On Astaria, filling loan intents as a lender allows you to earn interest and possibly additional rewards. To get started here, you have two main avenues to consider:

  • 📝 Creating a lend intent — Define your lending terms and submit your intent through the “Lend” interface of the Astaria app.
  • 💻 Or using the Intent Feed — Monitor the Intent Feed for borrowing requests that meet your criteria and click "Fill" to provide a loan. Lenders can leverage the "Repeat fill toggle" to continuously lend out their capital under specified terms or choose to engage in individual loan agreements.

Once you've filled a loan, and it's live, the borrowing terms are set in motion. This includes the fixed APY you've agreed upon at the time of filling the intent.

After a loan has been active for 24 hours, remember that lenders have the option to initiate a recall auction. This is a strategic move to either adjust the loan terms or exit the loan by finding another lender to take over the debt.

Should the recall intent not be filled by another lender, and the borrower fails to repay the loan, you as the original lender have the right to claim the borrower's collateral. This serves as a protective measure for lenders against loan defaults.

Zooming out

Astaria represents a leap towards a more accessible, efficient, and secure DeFi lending environment. By removing the reliance on oracles and introducing an intent-based mechanism, Astaria simplifies the complex world of crypto lending, making it more approachable for beginners. With NFT support, the protocol also offers interesting NFTfi possibilities. If it can continue to evolve and gain further traction, it can become a major lending hub on Base and beyond. 

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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