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Torches is a decentralized non-custodial liquidity protocol based on KCC, where users, wallets and dapps can participate as depositors or borrowers. Depositors provide liquidity to the market to earn a passive income, while borrowers are able to borrow in an over-collateralised manner.
Torches utilises common pool-based mechanics where all funds deposited participate in interest-bearing activities equally. Based on KCC, it utilises extremely low fees(~only few cents per transaction) making it highly attractive for both high and low volume deposits and loans.
In order to use the service, you simply supply your preferred assets . After supplying, you will earn passive income based on the market borrowing demand. Depositing assets allows you to borrow other assets by using your deposited assets as a collateral.
Additionally, some tokens(for example, KCS and USDC) are safely staked within the ecosystem to earn additional income for the depositors.
Your funds are stored in a system of smart contracts. The code of the smart contract is public and open source. You can withdraw your funds from the pool or export a tokenized (tTokens) version of your lender position.
The risks related to the Torches protocol are mainly smart contract risk(risk of bugs within the protocol code) and liquidation risk (risk on the collateral liquidation process).