Digest Communities LightYear Season Profile Management

SPOT Protocol Introduces Liquidation-Free Crypto Lending Through AMPL Tranching

🎯 Lending Without The Cliff-Dive

By Ampleforth

Aug 21, 2025, 4:08 PM

News article

Photo by Ampleforth

SPOT Protocol introduces a novel approach to crypto lending that eliminates the need for liquidations. The system works by tranching AMPL tokens in a Rotation Vault, creating:

SPOT: A senior, low-volatility claim
stAMPL: A junior tranche that absorbs volatility

Key features:

Solvency maintained through structure rather than margin calls
Funding Rate mechanism automatically rebalances system demand
Continuous operation independent of weekly tranche rotations
Protocol fees scale with system equilibrium

The result is a permissionless, censorship-resistant lending system that protects both lenders and borrowers without traditional liquidation mechanisms.

Sources

Most lending in crypto assumes collateral can cliff-dive, so it protects lenders by liquidating borrowers. SPOT deviates from that logic. The $SPOT token is created by tranching $AMPL in the Rotation Vault: deposits are split into a senior, low-volatility claim (SPOT) and a

5:40 PM · Aug 20, 2025

Read more about Ampleforth

Stablecoin Censorship Powers Raise Concerns

Stablecoin Censorship Powers Raise Concerns

Major stablecoin issuers continue to exercise significant control over user funds: - Circle has blacklisted over $100M in USDC across 275+ addresses - Tether has frozen more than $500M to date - Recent actions include freezing 32 addresses linked to conflict zones The SPOT protocol offers an alternative approach: - No admin keys or pause functions - Cannot be censored or reversed - No personal information required - Immune to regulatory intervention *Key Insight*: While major stablecoins maintain deliberate control mechanisms, censorship resistance emerges as a crucial feature for trust-minimized financial systems.

GovernanceDeFiStakingYield