CLOB Lending Protocol
📖 Centuari Protocol — deCentalized Lending Order Book (CLOB) Matching Engine
📌 Overview
In traditional DeFi lending protocols, liquidity provision and borrowing often rely on pooled automated market makers (AMMs) or static peer-to-pool models. However, Centuari innovates by integrating a Central Limit Order Book as its core matching infrastructure, enabling lenders and borrowers to directly submit and compete through limit orders. While it follows the foundational mechanics of traditional CLOB systems as found in spot or perpetual trading it adapts them specifically for fixed-rate lending use cases.
This allows the protocol to achieve:
Dynamic interest rate discovery
Composable order-based lending markets
📌 How It Works: Lender & Borrower Matching
In Centuari:
Lenders submit lend orders, specifying the amount of assets they’re willing to lend, the fixed interest rate, and market duration.
Borrowers submit borrow orders, detailing how much they wish to borrow, the maximum rate they’re willing to pay, and the loan period.
Centuari supports two primary order types Market Order & Limit Order.
Once a match occurs:
The system locks the lender’s liquidity.
The position is opened, and repayment obligations are tracked.
Limit Order
A Limit Order allows users to specify a target interest rate.
A lender can place a limit order to lend at a specific minimum rate. The order will only be matched if a borrower accepts that rate or better.
A borrower can place a limit order to borrow at a specific maximum rate. The order remains pending until a lender is willing to lend at that rate or lower.
Limit orders are stored on the order book and follow a matching logic based on rate priority (best rate first)
Market Order
A Market Order is executed immediately against the best available rate in the order book.
If the user acts as a lender, the system will automatically match their order with the highest available rate offered by borrowers at that moment.
If the user acts as a borrower, the system will match their order with the lowest available rate offered by lenders.
📌 Why Use a CLOB for DeFi Lending?
Advantage
Explanation
True Market Discovery
Rates are set by supply and demand through visible limit orders, not static curves.
Order Customization
Lenders and borrowers can specify exact terms: amount, duration, rate.
Composability
CLOB integrates smoothly with underwriting and oracle validation processes.
Capital Efficiency
Orders remain open until matched — no idle capital stuck in a pool.
🧠 Order Book Engine: Powered by Solady
Centuari’s order book is implemented using the highly efficient and gas-optimized Solady library. Solady provides low-level utilities and data structures that enable:
Fast and deterministic matching logic
Efficient storage of order state
Minimal gas overhead for execution and cancellation
This foundation ensures that the Centuari CLOB is not only trustless and transparent, but also performant enough for high-frequency order flow in a lending environment. Read more here.
Conceptual Process Flow
Borrower:
Submit Order The borrower submits a market or limit order to borrow funds.
Collateral Supplied The borrower provides collateral (e.g., ETH, WBTC) which is securely stored in the smart contract.
CLOB Matching Engine Activated
For market orders, the system searches for the lowest available lending rate.
For limit orders, the order is added to the queue based on the specified borrowing rate.
Order Matched Once a match is found, the borrower receives the requested loan amount.
Debt Position Recorded The protocol records the loan parameters: borrower address, borrowed amount, interest rate, and maturity.
Repayment or Liquidation
If repayment is made on time, the collateral is returned to the borrower.
If the borrower defaults, the position becomes eligible for liquidation.
Lender:
Submit Order The lender submits a market or limit order to lend funds.
Funds Deposited The lender transfers funds (e.g., USDC) to the contract as part of the order placement.
CLOB Matching Engine Activated
For market orders, the system looks for the highest available borrowing rate.
For limit orders, the funds are queued by the rate set by the lender.
Order Matched When a borrower match is found, the funds are lent out instantly.
Receive CBT Token The lender receives a CBT (Centuari Bond Token) representing their active lending position.
Borrow Share Allocation The lender receives a proportionate share of the lending pool, used for debt accounting and interest accrual.
Redemption with Interest Upon successful loan repayment by the borrower, the lender receives the principal and interest based on the agreed rate and maturity.
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