Protocol Overview
Features
📊 Configurable markets and pools
Markets define global constraints, while each asset pool is configured independently with its own risk parameters: LTV thresholds, variable rates, interest curves, and fees. This produces predictable, policy-aligned credit lines suitable for institutional borrowers and RWA issuers. Markets support multiple operational statuses for fine-grained control, from fully active to selectively or fully frozen (withdrawals can only be temporarily frozen).
🔀 Composable batch operations
Users can combine multiple lending operations into a single atomic transaction (for example, flash borrow + swap + deposit + borrow) to build a leveraged position in one step. A single wallet can also maintain multiple isolated positions using different seeds.
📈 Reactive interest rates
Each pool can optionally enable a reactive interest rate modifier that dynamically adjusts rates toward a target utilization level, smoothing rate volatility and improving capital efficiency. This feature is configured per pool and can be disabled by setting the reactivity constant to zero.
🔒 Time-locked governance
All configuration changes follow a queue → wait → apply pattern. Pool creation, parameter updates, and market-level changes must wait a fixed period before taking effect, giving users advance notice. Admin transfers also require a two-step handoff.
🏷️ Per-pool status flags
Admins can independently enable or disable specific operations (deposits, borrows, collateral additions, and flash loans) per pool without affecting the rest of the market. Withdrawals(except for expirable bad debt lock), repayments, and collateral removals are always available.
🛡️ Guarded risk controls
Markets are isolated from each other. Utilization-based throttles and interest curves help keep liquidity healthy. Circuit-breaker logic at the oracle layer blocks price-dependent actions on stale or suspect prices. Liquidations execute in slices rather than all at once, reducing price impact.
⚙️ Stellar-native compliance primitives
Built-in support for KYC, regulated assets, anchors, and fiat ramps enables policy-aligned participation and simpler institutional onboarding on Stellar.
Use Cases
Liquidity provision
Who: Retail/whales, ecosystem treasuries
Flow: Supply USDC/XLM/EURC to RWA markets → supplied assets are borrowed by users who have RWA assets as supplied collateral
Outcome: Earn safe and transparent supply yield
Leveraged exposure
Who: Funds, family offices, market makers
Flow: Combine flash borrow, swap, deposit, and borrow into a single atomic batch → gain leveraged exposure in one transaction
Outcome: Capital-efficient leveraged positions without manual multi-step execution. The flash-loan approach allows choosing a precise leverage multiplier in a single transaction, which is not possible with manual looping.
Hedging & risk management
Who: Institutions, hedge funds, corporates
Flow: Supply RWA as collateral into a permissioned pool → borrow stablecoins → hedge or diversify exposure through allow-listed venues
Outcome: Hedge risk while keeping RWAs on the balance sheet
Issuer / originator credit line (RWA-backed borrowing)
Who: Tokenized T-bill/MMF issuers, trade-finance originators, structured-credit vaults
Flow: Supply eligible RWA collateral → borrow stablecoins up to the pool's LTV limit → use for new originations, redemption bridges, or working capital
Outcome: Predictable working capital without selling RWAs, with clear limits and automated risk controls
Market-maker funding (short-dated, revolving)
Who: KYC'd market makers and arb desks on allow-listed venues
Flow: Post eligible collateral → borrow stablecoins → deploy on listed venues → at term, repay or roll; limits and rates auto-adjust with utilization
Outcome: Low-friction short-term funding with clear caps and guardrails; exits remain open under stress
Fee Model
Alula's revenue model combines two fee types: a take rate (a portion of accumulated borrower interest) and operation fees (one-time fees charged per operation). Protocol-side recipients (such as an insurance fund or treasury) can be configured as beneficiaries for each fee type independently, enabling flexible routing with different split configurations per fee source.
Take rate (streaming)
As interest accrues, a configured take rate diverts a portion of borrower interest before it reaches lenders. The accrued amount is distributed to the pool's take rate beneficiaries when anyone triggers the permissionless fee distribution. Supply APY is always shown net of the take rate.
Operation fee (atomic)
Certain operations (such as borrowing or flash loans) charge a fee as a percentage of the principal. If a referrer is configured, they receive an immediate cut settled in the same transaction. The remaining fee accrues and is routed to the pool's operation fee beneficiaries on distribution.