Self-lending and Proof of Demand (LVF)

The Problem

In traditional DeFi lending systems, a market cannot form until liquidity is provided by a lender. This supply-first architecture creates a “cold-start” problem, particularly for long-tail or newly launched assets, where borrowing interest may exist but is unable to manifest. Without initial capital, interest rates remain flatlined, no revenue is generated, and no market signal emerges for potential suppliers.

The Solution

Peapods introduces a novel mechanism—Self-Lending—paired with a signaling framework known as Proof of Demand (PoD). These components allow a borrower to simulate both sides of a lending market in a single atomic transaction. By flashloaning the paired asset, momentarily supplying it, and then borrowing it back against a collateralized LP, the user triggers 100% utilization. This serves as an on-chain signal to external capital: yield exists here, and capital is needed.

The process is: - Fully collateralized - Conducted in a single transaction - Permissionless and non-emissive

The result is a market that can emerge spontaneously from user demand—without coordination, external incentives, or prior liquidity.