DeFi has made great strides towards blockchain-based technology providing a system of financial rails alongside traditional financial infrastructure.
To scale up the digital innovation ecosystem and give fintech new impetus, financial projects are figuring out how to integrate next-generation technologies with finance. Emerging technologies such as 5G, cloud, big data and AI will pave the way for finance by ushering humanity into a new era, from connecting individuals to connecting things to the development of a fully connected and intelligent world. is being cut open. As the world enjoys these intelligent systems and smart homes, the financial sector is benefiting from intelligent computing and automation capabilities through blockchain technology.
Blockchain gave birth to decentralized finance (DeFi). This is an emerging and exciting financial technology that gives centralized finance a competitive edge. DeFi is building the future of finance through a new and innovative financial infrastructure, moving away from the existing financial infrastructure used by traditional finance (TradFi).
DeFi is on an upward trajectory, with new financial models emerging every day in the ecosystem. Thanks to DeFi, we have investment tools such as liquidity mining, staking and DeFi loans. Above all, decentralized exchanges. How can DeFi sustain this growth trajectory?
Decentralized finance as a constantly changing and growing space
DeFi is a blockchain-based technology that ushers in a fundamental change in finance through the promotion of entirely new financial products and services that reduce reliance on traditional gatekeepers and stakeholders in the TradFi industry. Let’s take a quick look at the transformative effects of DeFi in finance today.
DeFi lending/borrowing and DeFi staking
One of the most popular uses of DeFi is the protocol-specific money market. Users can borrow, lend and bet crypto assets by providing liquidity to their chosen protocol in various types of aggregated liquidity pools.
One problem with DeFi lending that most investors are wary of is over-collateralization of digital assets. Excessive collateral raises questions. Why wouldn’t users receive similar amounts to what they provided as collateral? The answer to this is that the protocol needs to be kept safe from becoming insolvent. Because of this need for safety, the aforementioned protocol offers over-collateralized loans. In fact, undersecured loans exist as an alternative. It reduces the burden on borrowers and lenders get more of the liquidity offered due to higher utilization rates. Undercollateralization is preferred as it is more user-centric and provides greater financial efficiency.
Currently, on-chain undercollateralization also comes with some tradeoffs. For example, some implementations that rely on borrower trust lead to protocols that whitelist only certain borrowers or restrict the eligible set of both lenders and borrowers. Such solutions are not permissionless, and to remove this hurdle from the lending ecosystem, Nolus goes one step further by:
- Allow borrowers to get more than what they offer.
- Come up with a completely permissionless feature where there are no restrictions on who can be a lender or borrower.
Decentralized exchange platform
A decentralized exchange (DEX) is a non-custodial, peer-to-peer marketplace that connects buyers and sellers of cryptocurrencies. This means that a user can manage her own private keys when trading on her DEX platform. With no central authority to manage the DEX, the platform deploys smart contracts that self-execute according to set conditions and record each transaction on the blockchain.
In addition, there are standalone DeFi projects that have built their own new technologies that are changing the financial scene in unique ways. One of these projects is Norrath Protocolbringing the world’s first DeFi lease to decentralized finance.
The Nolus Protocol Pioneers a Revolutionary Change to DeFi
As a future Web3 financial suite, Norrath To further revamp the DeFi space, we have devised an innovative money market approach with our proprietary leasing solution. They have comprehensive, intuitive, and easy-to-use solutions that will help drive mainstream adoption of DeFi. The goal is to integrate TradFi and DeFi using a holistic approach that leverages various financial tools and benefits offered by decentralized finance.
Leasing/Lending on Nolus
The protocol incorporates traditional leasing financing into DeFi leasing by providing a solution that most people are familiar with. User does not need to be a financial expert, tight margins He can secure more digital assets than his current balance without worrying about call formulas or complicated lending fee structures.
Fiat ramping is a proposed part of the Nolus DeFi lending mechanism and is actually a work in progress, allowing users to convert fiat to cryptocurrencies. Once launched, users will be able to take advantage of this DeFi leasing solution. Once fiat onramping is enabled on Nolus, users will be able to transfer fiat or cryptocurrencies from their bank accounts/debit/credit cards/crypto-enabled wallets, make a down payment of their desired amount, and approve smart contracts.
Nolus Defi Lease gives users complete freedom to customize the parameters of their on-chain contractual agreements.
Key features of DeFi Lease include:
- Up to 150% financing for initial investment.
- 40% lower liquidation rate compared to the market average.
- Low total cost of funding and transactions.
- You own the assets.
- Mechanism of self-repaying loans.
Contributing to DeFi growth and adoption by unifying diverse financial services into one platform
Mass adoption of DeFi technologies such as; Norrath Protocol As explained above, a new paradigm of financial products and services leveraging blockchain and tokenized digital assets will emerge. Users can use her DeFi as an investment tool to access other financial instruments such as lending, staking, derivatives trading, borrowing, and even her Nolus new her DeFi lease his solution.
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