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New DeFI platform gets loans without guarantee

Key facts:

This option is called a fast loan and charges 0.35% on the required amount.
The platform can handle 16 different assets, including 5 anchored cryptocurrencies.

This week, the Aave protocol began working on the main Ethereum network. Developers point out that through the tool, users of the platform can request loans in cryptocurrencies without providing exchange guarantees.

Aave is an open source project specializing in decentralized financial services (DeFi), founded by Stani Kulechov in 2017. The agreement focuses on the deposit, exchange and processing of cryptocurrencies, including additional services such as loans and savings rates. One of the most prominent instruments of the agreement is “quick loans”, which Aave ordered to baptize its unsecured loans.

This service is well known in the financial industry because, as the name suggests, borrowers can recover their funds without having to provide guarantees to lenders. That is, no commodity is needed and the asset or guarantor can accept the loan as a payment guarantee.

In this case, the Aave platform has a smart contract that establishes and guarantees the fulfillment of loan terms for both parties. Each contract is personalized, indicating which assets and how many assets the subscriber will receive. The borrower accepts cryptocurrency for a single transaction, which is conditional on repayment of the loan within a certain period of time. If you do not keep your promise, the transaction will be reversed and all operations performed through the loan up to that point will be cancelled.

The interest rate for emergency loans is 0.35% of the requested amount, which is significantly higher than the cost of 0.025% of normal platform loans. The platform has about 16 different cryptocurrencies, of which 5 are anchored or stablecoins. Assets such as ether (ETH), dai (DAI), basic attention token (BAT), USD tokens, tether (USDT) and TrustToken (TUSD) are part of its ecosystem.

New DeFi platform

In addition to fast loans, Aave offers new models of interest rates and tokenization. The first is “ATokens”, which can tokenize tokens with a value of 1: 1 on their effective support. Developers guarantee that in this way, users will be able to make more profit, because they will not depend on the exchange rate of the asset, but on the market value of the asset.

“Stable interest rates” is another new interest rate model for the platform. It allows all platform loans to have fixed short-term interest rates that can be rebalanced within months based on market fluctuations. According to the press release, this option will protect users from fluctuations in the cryptocurrency market.

The agreement also has its own price prediction, called Oracle Aave, backed by Chainlink. The tool allows the calculation of new loan rates for servers and users in a decentralized manner. In this way, the service uses about 16 different prices to determine the price that should be charged to the platform.

DeFi will have a completely decentralized government and its own cryptocurrency, LEND. The board said that while they are still in the process of reviewing, they are working on a network that is fully controlled by users. The owner of LEND will be the owner of future decisions on Aave governance. However, during the startup phase, the directive will be responsible for managing the entire platform.

Source: Compiled from CRIPTONOTICIAS by 0x. Copyright belongs to the author Andrea Leal, and may not be reproduced without permission

0X Simplified Chinese: New DeFI Platform Gets Loan Without Guarantee

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