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Moola MOO: A DeFi Application on the Celo Blockchain that turns Smart Phones into Banks

By 2sats | 2sats | 15 Mar 2022


*obligatory not financial advice*

 

What is Moola Market?

Moola Market is a DeFi protocol that runs on the Celo blockchain. It is a simple lending protocol that allows its users to earn interest on their stablecoins and CELO coins.

Celo is a smart contract blockchain that aims to bring DeFi to all smart phones, because today more people have access to phones and internet than to a traditional bank. The blockchain allows people to register their phone number as a public key, which makes it easy to send money to everyone you have saved as a contact and most dApps can be easily accessed from a phone. Celo also has unique stablecoins that keep their peg algorithmically and are also backed by a treasury, those stablecoins can also be used to pay for transaction fees, meaning that you can use the blockchain to store your money completely without any risk from the high volatility of cryptocurrencies.

Moola is a lending protocol on this phone friendly chain that makes it possible to earn interest on your Celo assets or take collateralized loans. This basically can turn any smart phone into a proper bank account. It is strongly based on the code of Aave and works like any other lending protocol does:

People that deposit funds receive m-tokens that represent their share of the pool and they can burn their m-tokens to get their deposited funds and earned interest back at any time. For example, if you deposit 100 cEUR and receive 100 mcEUR and then you hold it for one year at an APY of 3%, then you can burn your 100 mcEUR to get your 103 cEUR. The earned interest is automatically added to the pool, meaning that the users get compounded interest.

People that want to borrow an asset have to supply a collateral first to ensure that the loan is safe. Such loans can be used for things like leveraged trading, where you take a loan to buy more of an asset you are bullish on, or to short the borrowed asset, by selling it and buying it back at a lower price to pay your loan back. You can pay the loan back whenever you want but should the value of your collateral fall or the value of your loan rise to a certain point, then the protocol will sell your collateral to pay your loan back.

The interest for both lending and borrowing is variable and depends on how many tokens are supplied and on how many are being borrowed. And the protocol also allows Flash Loans without any collateral.

Moola Market supports only very few assets, these being cUSD, cEUR, cREAL and CELO. This gives Moola relatively limited utility but there are actually far more tokens on Celo that could eventually be added. Right now the dApp allows Celo users to get an APY of about 3% on its stablecoins, which sounds like a quite low APY for DeFi projects, but it’s pretty good in comparison with traditional banking. This allows everyone with an internet connection to not only store their savings in stabelcoins on the blockchain but also earn decent interest.

Celo has a great vision of banking the unbanked which could improve the lives of millions of people. Moola is one of the most used dApps there and enriches it with a useful service and has great potential.

 

 

The MOO token

MOO is the native token of the Moola Market. The protocol is currently very centralized but it will slowly develop into a DAO and transfer the governance to the MOO token holders. Once this happens the token holders will be able to propose and vote on changes to the dApp.

There is a max supply of 100,000,000 MOO tokens and there will only ever be more if the token holders vote to increase the supply. Roughly 51.04% are going to the Moola community, 1.87% are going to very early users of Moola, Ubeswap and the Valora Wallet, 5% are going to the Celo Treasury that backs all the native stablecoin to support the ecosystem, 23.57% were sold to investors and are being vested over 12 months and 18.52% were reserved for the founders, their employees and advisors. The tokens for the community can be earned by supplying liquidity to the mcUSD/mcEUR and the MOO/mCELO liquidity pools on Ubeswap and staking the LP tokens on the Ubeswap farms.

The value of the token depends on how many funds are located in the Moola Market smart contracts because governance rights have a higher demand if they effect more money. It is one of the most used dApps on Celo and if Celo performs well then Moola will too. Celo and Moola have both great utility and potential. However, Moola Market supports only very few tokens at the moment and it is still centralized and will only slowly turn into a DAO.

The MOO token can only be bought on the Ubeswap DEX or can be earned by farming there. You can use a Valora Wallet to store your tokens and interact with the Celo blockchain, but you can also use a MetaMask Wallet if you connect it to Celo.

 

 

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