Osito supports any newly issued tokens on Berachain as collateral for lending and immediately earns wBERA rewards after launch.
Initially integrated with Panda Factory and ramen_finance.
In simple terms, new tokens launched on these two platforms can be directly used as collateral in Osito to borrow $wBERA without lengthy and tedious governance processes, and without the worry of being liquidated, thus further releasing more liquidity.
New tokens only need to meet two core requirements:
1⃣ Must have a provable fixed token supply.
2⃣ Must have verifiable permanent destruction of LP.
Traditional DeFi lending relies on oracles for price feeds + team or DAO decisions on which assets can be collateralized + constantly adjusting risk control parameters.
Sounds reasonable? However, in extreme market conditions, oracle failures, lagging risk parameters, and slow governance responses can lead to collapse.
Osito has taken a different approach:
Instead of referencing how much a token is worth now, it considers the worst-case scenario of how much BERA can still be extracted from the pool.
Because many times, the displayed value of a token is merely paper wealth, while liquidity is the key determinant of how much value you can exit with.
Thus, Osito's mechanism is actually very conservative, safe, sustainable, and purely on-chain computation, requiring no external data.
Osito's core formula is very simple:
Maximum borrowable = BERA in the pool - BERA that can be extracted in the worst case.
How this "worst case" is calculated depends on the type of liquidity pool the token is in.
- For traditional CPMM pools (like x*y=k), Osito calculates the ratio of sellable tokens to tokens in the pool to arrive at a stable extraction estimate;
- For concentrated liquidity pools (CLMM), a more conservative method is used to estimate potential liquidity shocks, further reducing risk.
An important point is: Osito does not treat "more collateral = more borrowing" as a simple linear relationship.
As more users deposit tokens, it triggers two mechanisms simultaneously:
- On one hand, due to reduced circulation, the borrowing capacity of a single collateral may rise;
- On the other hand, the global limit will gradually be filled, potentially compressing the limits of each position.
This non-linear dynamic adjustment mechanism makes the entire protocol more resistant to manipulation and herd effects.
