Introduction

Borrowing against the underlying tokens normally requires redeeming the LP position first. That reduces or closes the position and stops fee accrual on the liquidity removed from the pool. Avana instead accepts supported LP positions as collateral. The position remains active in its AMM while Avana tracks its value. An internal vault collateral token represents the backing position in Aave v4's borrowing accounts.

A borrower deposits an approved LP position into the relevant Borrow Spoke, but the liquidity itself stays deployed in the underlying pool instead of being redeemed first. The spoke rebuilds the position from its pool data, prices the underlying exposure through the oracle stack, and then discounts that value through collateral factors and market-specific controls. If the resulting capacity is sufficient, the loan draws from shared Hub liquidity while health checks, collateral accounting, and liquidation behavior remain specific to that spoke.

Depositing an LP position as collateral leaves its liquidity in the underlying AMM. The borrower can access a loan without first redeeming the position for its underlying assets. Borrowing power comes from the actual structure of the position: token mix, accrued fees, active range when relevant, available depth, and the way the position could be exited during stress. LP collateral is not handled as a generic token balance. Each supported market defines how value is recovered, what gets sold or unwound, and how debt is closed if the account becomes unsafe.

The architecture separates shared lending accounts from LP-specific collateral management. The Hub manages reserves and debt, while each Borrow Spoke determines borrowing capacity and liquidation handling for its supported LP markets. The Lend Spoke routes supplier deposits into the Hub, so supplying capital does not require managing an LP position.