Major decentralized cryptocurrency exchange, Sushi, has announced their launch of Kashi, an innovative lending and margin trading platform that supports a new set of previously inaccessible token pairs for shorting, made possible with its unique risk isolation infrastructure. Kashi users will have the opportunity to maximize idle token yield generation by creating lending pairs of their choice by depositing assets in Sushi’s highly anticipated new token vault, BentoBox.
BentoBox is a cryptocurrency token vault which generates yield from flash loans and other protocols built from the strategies of its framework. It serves as a decentralized “App Store” where users can deposit assets to enable other Dapps. The main cause of the excitement behind this new product is its revolutionary ability to maximize token yield generation through dual token usage. BentoBox allows tokens in its vault to be used on Dapps built on its infrastructure, such as earning yields from flash loans on Kashi, while simultaneously earning interest in DeFi protocol farms, such as those realized by participating in Sushi’s Onsen pools.
BentoBox serves as the wallet for the Kashi lending and margin trading platform and as an optimized solution for the Ethereum network’s transaction time and fees, a timely benefit with gas fees at their all-time highs. This results in short trading that can be done in a single transaction with more than 1x leverage. However, to reiterate, the crucial role that the vault plays is that it allows users to earn interest by lending out their assets to margin traders, while simultaneously earning yield on the same tokens from liquidity providing or farming on DeFi protocols.
For users to participate, and make the most use of their cryptocurrencies, they simply need to add assets to the BentoBox vault and link the storage mechanism to Kashi. Users can then create the supply/borrow pair of their choice to lend or select from a wide range of tokens from a wide range of risk tolerances to short.
Kashi’s margin trading solution uses an elastic interest rate with a target utilization rate of 70-80% of the total supply. To put it simply, the elastic interest rate increases if the pair is underutilized and decreases if over-utilized. This structure ensures that suppliers are incentivized to maintain their supply of in-demand assets on the platform and, oppositely, the elastic rate keeps assets that receive less interest, off the platform.
Members of the Sushi community have been rallying for the release of BentoBox and Kashi as it offers traders a large variety of tokens that are not yet currently widely available for shorting. This is due, highly in part, to its isolated risk lending pool framework. Similar lending or margin trading platforms are unable to support high-risk assets due to the susceptibility of the entire pool. Since even one asset can greatly affect other cryptocurrency lending solutions, many have exempted volatile tokens from their margin trading offerings. Since Kashi is not prone to this type of susceptibility, it is able to set itself apart by supporting high-risk assets for margin transactions to traders.
Users will not only be able to short a larger selection of tokens with varying risk tolerances, but will also be able to create leveraged short positions. Fees associated with these transactions will be paid to Sushi xSUSHI holders, adding an additional layer of platform user benefits from the Kashi Lending and Margin Trading Platform. These transactions may result in a higher trading volume on the associated swap pool, which may be executed on Sushi.
Sushi is set to release both BentoBox and Kashi V1 on Tuesday, March 16th. The initial version of Kashi will include a set of pre-existing lending pairs for users to short trade. Further announcements about Kashi V2, which includes its lending pair creation interface, will be released in the next few weeks, according to the Source.