Beta Finance

Beta Finance is a protocol that operates on an isolated collateral model, primarily serving the decentralized finance (DeFi) community. This model allows users to have unrestricted access to digital tokens that run on permissionless protocols. The platform supports activities such as borrowing, lending, and shorting crypto assets. It is set up on the Ethereum Mainnet, requiring users to have a digital wallet connected to this network, such as Metamask or Coinbase, to access its services​​.

Isolated Collateral Model: Beta Finance uses an isolated collateral model to eliminate the risks of cross-collateralization. This model helps investors safeguard their investments when they use borrowed amounts to diversify holdings. For example, in a situation where a user has collateral in two different assets, a loss in one does not affect the other, thereby protecting the user's overall portfolio​​.

Lending: Users can lend their assets to any money market on Beta Finance. In return, they receive bTokens, which represent their share of interest from the underlying tokens. This lending mechanism allows users to earn yield from lending interest rates paid by borrowers and short sellers​​.

Borrowing: Beta Finance allows borrowing against collateral, subject to loan-to-value (LTV) ratios and safety parameters specific to each asset tier​​.

Short Selling: Users can short sell by using supported collateral to enter short positions. They have the option to leverage a borrow on the platform and sell the borrowed token. This is in line with the borrowing mechanism on Beta Finance​​.

Risk Management Framework: The protocol’s risk framework ensures that the liquidation of a single asset doesn't impact the entire protocol. Support for collaterals is determined based on liquidity ratios, with assets categorized into different tiers based on their liquidation LTV, safety LTV, and liquidation bonus tokens​​.