We are thrilled to announce a significant milestone for Lista DAO: the successful approval of the LIP proposal to integrate PancakeSwap LP tokens as collateral under Lista Lending’s CDP Zone. This update marks a pivotal step in enhancing capital efficiency, expanding collateral options, and fostering deeper synergies between Lista DAO and PancakeSwap, the leading AMMs on the BNB Chain.

Available through our CDP Zone, this feature enables users to utilize their PancakeSwap LP positions to unlock greater borrowing capacity while maintaining exposure to yield opportunities.

In phase 1, the following LP pairs that will be supported are as follows:

1. USDT/WBNB V3 5bp

2. USDT/USDC V3

Supported LP Tokens: The integration supports PancakeSwap’s V2, V3, Infinity, and StableSwap LP tokens, starting with those holding the highest Total Value Locked (TVL) in Phase 1, with plans for gradual expansion.

Collateral Valuation: Since there is no direct market for pricing LP tokens, our custom LP Oracle and LP Manager system will provide accurate valuation of the LP tokens with built-in safety factors to mitigate under collateralization and liquidation risks.

Risk Management: To safeguard the protocol, we’ve implemented the following risk management

1. Conservative safety factors in our LP price calculation using LP Oracle & LP manager. This means that we will have a

2. borrowing caps per LP type, and circuit breakers that pause borrowing if major tokens (BTC, ETH, BNB) experience a price drop of more than 5% within 10 minutes.

Liquidation Process: In the event of collateral value falling below the Loan-to-Value (LTV) threshold, our system supports LP redemption before triggering a Dutch auction, maximizing recovery value for users.

Profit Sharing: To strengthen our partnership with PancakeSwap, 50% of borrow interest and liquidation fees generated from lisUSD borrowed against LP tokens will be shared with PancakeSwap, fostering mutual growth and ecosystem benefits.

This integration brings a range of advantages for Lista DAO users and the broader DeFi ecosystem:

Enhanced Capital Efficiency: By allowing PancakeSwap LP tokens as collateral, users can maximize the utility of their liquidity positions, unlocking new borrowing opportunities without sacrificing their LP holdings.

Broader Collateral Options: This update diversifies the assets users can pledge, making lisUSD borrowing more flexible and accessible.

Strengthened Ecosystem Synergies: The collaboration between Lista DAO and PancakeSwap promotes shared liquidity, user adoption, and revenue opportunities, driving growth for both protocols and the BNB Chain ecosystem.

Here is a video example of how users can borrow lisUSD using Pancake swap LP tokens under our CDP zone. In this example, we will be using USDT/USDC V3 LP tokens as an example.

The approval of this proposal reflects Lista DAO’s commitment to pushing the boundaries of DeFi innovation. By integrating PancakeSwap LP tokens as collateral, we are not only enhancing the functionality of our CDP module but also fostering a stronger, more interconnected DeFi ecosystem on BNB Chain. This update aligns with our mission to provide users with safe, flexible, and efficient tools to maximize their capital.