Delta Mechanism

Evoq has robust mechanisms to ensure that user assets remain liquid. However, if a supplier matched P2P tries to withdraw their funds and the transaction incurs high gas costs due to the matching engine's iterations, the delta mechanism addresses this issue to maintain liquidity in all scenarios.

To limit gas costs, Evoq can instantly halt the matching engine at any time. However, this means users may not be properly unmatched and might receive the P2P APY instead of the underlying protocol's APY, which they should be receiving. There is a delta between what is matched P2P and what should be matched P2P if there was no maximum gas consumption. This difference is reflected in the underlying protocol. Thus, we need to consider two cases: incompletely handled repayments and incompletely handled withdrawals.

If there is excess liquidity (incompletely handled repayments):

Evoq supplies the remaining amount to the underlying protocol, benefiting from the protocol's supply APY. Meanwhile, some suppliers remain matched with the repayer, earning a higher APY.

If there is excess debt (incompletely handled withdrawals):

Evoq borrows the remaining amount from the underlying protocol, paying the protocol's borrow APY. Some borrowers remain matched with the withdrawer, paying a lower APY than Evoq's actual borrow APY.