🛠️ The Problem It Solves

Decentralized finance (DeFi) has unlocked powerful financial tools like lending, borrowing, and yield generation. However, the current DeFi landscape suffers from chain fragmentation — most lending and borrowing protocols are siloed within individual chains. This creates serious limitations:

• 🔒 Liquidity is locked within a single network, reducing capital efficiency.
• 🧩 Cross-chain lending protocols are either nonexistent or highly complex, requiring users to interact with multiple dApps, wallets, and bridges.
• ⚠️ Manual liquidation and collateral monitoring increases systemic risk, leaving protocols vulnerable to undercollateralization during volatile market conditions.
• ❌ Lack of secure and standardized cross-chain communication exposes users to bridge exploits and poor UX.

✅ How This Protocol Solves It

Our project introduces a fully decentralized, cross-chain lending and borrowing protocol that enables seamless collateralization, borrowing, repayment, and liquidation across EVM-compatible chains — specifically Ethereum Sepolia and Avalanche Fuji testnets.

🌉 Chainlink-Powered Cross-Chain Infrastructure

• ✅ Chainlink CCIP (Cross-Chain Interoperability Protocol) is used to transfer messages and tokens securely between Sepolia and Fuji.
• ✅ Chainlink Price Feeds deliver real-time, tamper-proof ETH/USD data, ensuring accurate valuation of user collateral.
• ✅ Chainlink Cross-Chain Token Manager enables deployment of a custom ERC20 token (YOK) across both chains, maintaining a stable 1 USD peg, which simplifies borrowing calculations and repayment logic.

🧠 What Users Can Do

For Borrowers

• 📥 Deposit ETH as collateral on Sepolia.
• 💸 Instantly receive YOK tokens on Avalanche Fuji via secure CCIP message.
• 💵 Repay YOK tokens on Fuji and unlock ETH collateral on Sepolia automatically.

For Liquidators

• 🔍 Monitor health factor in real-time via Chainlink Price Feeds.
• ⚔️ Trigger liquidation if user becomes undercollateralized (health factor ≤ 1).
• 💰 Receive a portion of seized ETH collateral as economic incentive.

For Developers & Protocol Integrators

• 🔁 Integrate safe, auditable CCIP messaging for cross-chain operations.
• 🛠 Build on a modular lending-borrowing stack with repay, liquidate, and health factor modules.
• 📦 Reuse cross-chain token contracts for other dApps needing pegged multi-chain tokens.

🔐 Why It Matters

This protocol demonstrates how next-generation cross-chain DeFi can be built securely and reliably using Chainlink’s decentralized services. It creates a trust-minimized lending flow that:

• Reduces reliance on centralized bridges.
• Protects users from undercollateralization.
• Enables builders to scale lending protocols across chains.

With increasing demand for interoperable DeFi, this solution addresses real-world limitations and presents a practical, extensible architecture for the next generation of decentralized finance.