Pragma Oracle is excited to announce its integration with Vesu, a key addition to our ecosystem, as we join forces to advance transparency and the trustless in the StarkNet DeFi landscape.

Introduction

Vesu is a novel DeFi money market protocol designed to push the boundaries of open and permissionless financial systems. Unlike traditional lending platforms, Vesu operates with a fully governance-less model, allowing users to create and manage lending pools without the need for intermediaries. Since going live almost a month ago, Vesu has rapidly gained traction, reaching $5 million in total TVL.

Its innovative features, such as adaptive interest rates, monolithic liquidity management, and customisable pool extensions, position Vesu as a next-generation solution for secure, efficient, and scalable DeFi lending. This article explores the core principles and key features of Vesu, followed by a deep dive into the crucial role Pragma plays in the protocol. It examines how Pragma ensures Vesu's security and reliability through transparent, real-time data feeds.

Inside Vesu 

Core Principles of Vesu

Vesu is built on a foundation of principles that distinguish it within DeFi. Central to its design is monolithic liquidity management, where all liquidity is concentrated within a single smart contract. This approach maximises capital efficiency, enabling the protocol to support a broad range of lending activities, including flash loans, without the drawbacks of fragmented liquidity.

Another key principle is the use of isolated lending pools. Each pool operates independently, allowing risks to be compartmentalised. This structure enables each pool to have its own distinct parameters, such as interest rate models, oracles, loan-to-value ratios, and more. Consequently, any issues within one pool do not affect the overall protocol, offering enhanced security and confidence for users by containing risks within specific pools.

Most significantly, Vesu is inherently permissionless. Unlike other protocols that rely on centralised governance, Vesu empowers anyone to create and manage lending pools. This open access model allows the market to drive liquidity allocation, promoting a truly decentralised financial environment where control is distributed, not centralised.

Key Features of Vesu

Vesu offers several innovative features that enhance its versatility as a lending platform. A key feature is the introduction of pool extensions, which allow developers to customise and create new lending solutions. This capability transforms Vesu from a simple lending platform into a flexible foundation for developing tailored financial products, all while benefiting from the platform’s secure and reliable infrastructure.

While pool extensions can be freely configured during the deployment of a new pool, Vesu highlights the power of this innovative approach through the use of factory extensions. These specific designs are detailed below:

1. Adaptive Interest Rate Model

This model, originally introduced by Fraxlend, automatically adjusts lending terms based on real-time market conditions, ensuring that both borrowers and lenders receive optimal terms. This adaptability helps maintain equilibrium within lending markets, even during periods of fluctuating supply and demand.

2. Fail-Safe Mechanisms

To further protect users, Vesu includes mechanisms designed to ensure stability and safeguard funds, even in volatile markets. For instance, an automated pool shutdown process is triggered if a pool becomes insolvent, or partial liquidation preventing further losses and enabling an orderly resolution. Vesu further strengthens security by integrating with Pragma, leveraging its unique capabilities to provide an additional layer of protection. These features are discussed in more detail in the following section.

To explore all the features of pool extensions and factory extensions in detail, please refer to the Vesu whitepaper.

Pragma's role in Vesu

Pragma is the leading Oracle on StarkNet, built from the ground up to remove any trust assumptions in current oracles' design. It stands apart with its architecture's simplicity, with no off-chain infrastructure, raw data is in real-time pushed on-chain by a large range of whitelisted data providers. Then the aggregation happens at the smart contract level. By adopting a fully on-chain design, Pragma ensured a transparent, decentralised & composable data feed.

Vesu's decision to integrate with Pragma reflects its commitment to maintaining the highest standards of reliability and security. The innovative design of Pragma's fully on-chain data feed aligns perfectly with Vesu's principles of transparency, decentralisation and robustness.

As mentioned above, Pragma's uniqueness lies in the fact that aggregation occurs at the smart contract level. This enables permissionless pricing, allowing builders to use raw data from providers and transform it as needed. Builders can choose their data sources and design custom aggregation methods. Like Vesu's isolated pool design, each asset can be priced differently, recognising that short-tail assets have different risks compared to long-tail assets. This flexibility and transparency make Pragma's design an optimal solution for pricing any asset.

Let’s get back to the Vesu implementation, one of the critical elements of this integration is Pragma's Median aggregator, which processes individual price data points from all sources, ensuring that the final price feed is both accurate and resistant to manipulation. By calculating a median price, Pragma minimises the impact of outliers and ensures that the prices used in Vesu's lending pools are a fair reflection of the market, thus maintaining the integrity of the protocol.

Moreover, Pragma's design allows for the incorporation of contextual data, such as the number of aggregated price sources and the timeliness of their submissions, into its feeds. This data is crucial for Vesu's factory extension, the oracle fail-safes, which protects the protocol from potential disruptions caused by stale or unreliable data. If the data provided by Pragma does not meet certain trustworthiness thresholds, the Vesu protocol is designed to trigger an Emergency Shutdown mode for the affected lending pools, ensuring that user funds remain secure even in the face of oracle failures.

The synergy between Vesu and Pragma Oracle doesn't just enhance security; it also opens the door to additional innovative design, Vesu serves as the foundational infrastructure for the future money markets, offering developers the freedom to create custom pool extensions through various available hooks. By harnessing the contextual & composable data, developers can utilise Pragma's data feeds to build more efficient, creative and responsive financial solutions.

Join the conversation! Follow Pragma on Twitter for updates, and connect with our community on Telegram.

Be part of the DeFi future 🧩