Blend & Meru Case Study

This section will focus on two main components: isolated lending pools and the backstop module. For details on the other items, check out the Blend documentation.

How does it work on Blend?

Blend is permissionless, meaning anyone can use a lending pool directly, implement a lending pool into their application, or deploy a lending pool and set the parameters that govern it.

Isolated Lending Pools

Blend employs isolated lending pools, meaning a user’s financial position and involvement in one pool is completely independent of all other pools. This ensures that the collateral and debt associated with one pool do not impact others — issues such as unpaid loans (bad debt), liquidations, or inaccurate pricing data (bad oracles) in one pool cannot affect users in another. As a result, users setting up a new lending pool don’t have to worry about unexpected risks from various other pools. (Blend pools are typically overcollateralized to help improve security)