Today we will review the Lending and Borrow Protocol available in the Algorand ecosystem, known as Algofi. It's not only a lending market, but also works as decentralized exchange and has its own stablecoin stablecoin, called STBL/STBL2. Let's get into the subject, let's go!
Well, then, as we can understand this protocol, in addition to being able to exchange assets, it has some strengths that we can highlight:
- Leverage assets: you can deposit ALGO or any supported asset as colatteral for more trading options;
- Borrow stablecoin: you have access to attractive borrow rates on stablecoins, as STBL Algofi's algorithmic stablecoin.
- Earn on other assets: earn lending interest and rewards with your cryptocurrency (ALGO/STBL2/USDC/USDt/goBTC/goETH).
To get an idea of the volume deposited and exchanged, let's look at the numbers on the date of this publication (January/2023):
Total supply: $82.4M
Ammount Borrowed: $16.7M
DEX TVL: $13.2M
24h Trading Volume: $345.5M
Before immersing ourselves in the functionalities of the interface, let's also clarify who the code auditors were, to be more secure in relation to this issue.
Runtime Verification - https://runtimeverification.com/
Nccgroup - https://www.nccgroup.com/
Coinspect - https://www.coinspect.com/
Next, after having understood a little about the proposal of the Algofi protocol, we are going to talk a little about its functionalities, a kind of review, in fact, of how it is possible to use it and how easy it is to interact with it. Let's check item by item available on the menu.
In this option, after having connected your wallet, you will be able to provide your available assets as a loan, as well as borrow others, having your asset provided as collateral. It is very important to pay attention to the percentage of "borrow utilization".
There is a limit to borrowing 90% of the max borrow. With the fluctuation of prices between Bitcoin, altcoins and stablecoins, you should be careful that this value does not exceed 100%, as this could lead to liquidation.
Next, let's get to know a little about the possibilities of providing liquidity and farming. As mentioned, there is also the option of exchanging assets through AMM, which requires liquidity.
By providing liquidity, it is possible to earn a percentage of the exchange volume fees and also stake in the BANK farm.
Actually, there are the following possibilities of assets and pairs for farming.
The option related to governance has two different meanings, one of them is the possibilities to vote on proposals available in the community and the other is to boost rewards in BANK farms.
With an amount greater than 100,000 veBANK, it is also possible to create proposals. The longer you lock your BANK balance, the more voting power you acquire.
And last but not least, we have the Vault option. This vault has an inherent function in the Algorand Foundation's Governance program. Through the Algofi protocol, it is possible to vote on the period governance program and use the assets voted on governance as collateral.
In the link below, you can check the 6th period of governance of the Algorand Foundation.
Using the links below, you can follow the progress of the community and the Algofi protocol, stay on top of news and the latest voting processes regarding the progress of the project and new updates.
It is always important to closely monitor projects like this, even more so when you have some percentage of investment in the network or in the protocol itself.