PROCLAIM: PROTOCOL-AGNOSTIC COLLATERAL LIQUIDATION AUCTION INTEGRATED MARKETPLACE

Abstract

The decentralized finance (DeFi) ecosystem has witnessed exponential growth, bringing forth innovative financial solutions that operate without traditional intermediaries. Central to DeFi’s lending platforms is the concept of collateral, which ensures trust in a trustless environment. However, the current mechanisms for collateral liquidation across various DeFi protocols are fragmented, leading to inefficiencies, potential systemic risks, and often suboptimal returns for lenders. This paper introduces PROCLAIM, a PROtocol-agnostic Collateral Liquidation Auction Integrated Marketplace. PROCLAIM aims to consolidate the liquidation processes of diverse DeFi platforms into a unified, decentralized marketplace. By doing so, it ensures assets at risk of liquidation are auctioned at their fair market value, reduces cascading liquidation risks, and enhances overall market efficiency. Furthermore, through features such as Tiered Auctions, Insurance Integration, and Cross-Chain Support, PROCLAIM offers a comprehensive solution that addresses the multifaceted challenges of the current DeFi liquidation landscape. This paper delves into the architecture, benefits, and potential challenges of PROCLAIM, offering a blueprint for a more resilient and efficient DeFi ecosystem.