Compound DeFi Fork – Sneak Preview Video – EasyFi Lending Protocol for Digital Assets – Matic Network – Under Collateralized Loans – Decentralized Micro Lending - Duel Farming

Compound DeFi Fork – Sneak Preview Video – EasyFi Lending Protocol for Digital Assets – Matic Network – Under Collateralized Loans – Decentralized Micro Lending - Duel Farming

By Perry1 | Blockchain Innovation | 11 Sep 2020


Introduction

DeFi borrowing and lending has a current total value of $6.45 billion. The growth in decentralized finance (DeFi) protocols on the Ethereum Network has been exponential in the last few months of 2020. DeFi broke $1 billion in February 2020, $2 billion on July 1 and $3 billion just 20 days later. However, the interest and dramatic increase in participation has resulted in the 4th blockchain dilemma - high fees as a consequence of the scalability issue. According to Zimware (September, 2020), Eth gas fees filled by the DeFi boom are threatening the viability of smart contracts. The increase in fees is a direct result of increased DeFi protocols and yield farming. More transactions lead to slower confirmations and higher gas fees. Fees on Ethereum have increased by approximately 100 times in the last several months. For example, the Publish0x the site where this article is published recently made the following announcement, “When we first started Publish0x, gas prices were 6 gwei. It cost us $10-20 to pay out 2000 people. Today gas prices hit an all-time high of over 460 gwei, nearly 100x the cost. We’re looking at $2,000+ cost for a payout at current gas prices. This is obviously not economically viable.” In light of the current problems hindering the growth of DeFi, EasyFi has created an innovative protocol due to be launched within a few days. The second-generation DeFi protocol will use Matic Network to provide in-built gasless meta-transactions, with an amazing user interface (UI) and user experience (UX) for an easy on-boarding. EasyFi is described by the project as A Layer 2 Lending Protocol for Digital Assets

Under-collateralized Loans & Micro-Lending

According to EasyFi existing DeFi protocols have tried to "improve collateralization ratios through the implementation of social risk distribution, Zero-knowledge proofs, and Credit DAO’s" (EasyFi Network, 2020). EasyFi intends to implement a new way to enable collaterized loans by using Trustscore, a product of Koinfox Exchange. Koinfox is a unique cryptocurrency trading and investment platform powered by the Proof of Reputation consensus algorithm and its native cryptocurrency wallet. Koinfox aims at helping crypto investors make profitable trades through empowering them execute better trading decisions on the intelligent trading platform. The current problem with DeFi is due to the high collateral required due to lack of transparency about the borrower’s credibility. EasyFi through TrustScore empowers a user to whitelist an ERC20 address for assessing DeFi as a market.

fd803012b553d385fe6ed1a2263cc7b719fbec47fd48c6dc7bbea914dfc54bce.jpeg

Billions of people do not have access to loans or any financial services. Global Findex (2017) states that as of 2017, 1.7 billion people did not have a bank account or access to financial products such as lending. According to EasyFi hundreds of millions of poor people are exploited and charged exorbitant interest rates to obtain micro-loans - which need to be paid back in short periods of time - forcing individuals to work only to pay back the loans and borrow again to survive. EasyFi micro-loans will enable small loans for medical, business or early salary at low interest rates, thus improving quality of life while simultaneously building financial credibility. EasyFi through TrustScore empowers a user to whitelist an ERC20 address for assessing DeFi as a market.

e60141d826ac9ccb72783fa0694e7866816c24cdb156051bcdb14ae4b414d2eb.jpeg

EasyFi as a Compound Protocol Fork

In Version 1 at its core, EasyFi is starting as a Fork of Compound Finance from Ethereum main chain to the Matic network enabling existing collateral-based secured loans on Layer-2. EasyFi will offer (1) secure (collaterized) loans; (2) under-collaterized loans; (3)micro-lending, (4)credit delegation and (5)credit default swaps.

Credit delegation - involves trust-based loans where the parties know one another or use Trustscore to determine the level of risk. Credit delegation will be used for larger loans requiring risk assessment. This type of loan would be similar to a secure collateralised loan but with much less collateral required (e.g. short term loans, working capital financing and project financing).

Credit Default Swaps

This type of borrowing will bring insurance to DeFi. An important feature will enable suppliers of loans, especially larger one's, to convert them to tradable instruments and sell them to institutional investors. Passive income products will therefore be secured by high guarantee loans provided by institutional investors in many instances.

How to Earn Easy Token -Yield Farming

EasyFi will enable users to farm it native protocol token "EASY" by interacting with the protocol. Anyone can farm EASY tokens when they interact with the platform. Farmed tokens are distributed on daily basis to the users based on their interaction contribution with the protocol. In other words, EasyFi will not have a token sale - to earn EasyFi, it will be required to participate on the borrowing and lending protocol.

DUAL FARMING WITH NATIVE STAKING

EasyFi is one of the first Defi protocols built on Matic Blockchain hence, Matic is supporting the EasyFi project community by offering a Native staking offering wherein addition to Easy tokens, users can also farm MATIC tokens by staking their farmed EASY tokens.

d98dbbce5b3ce748f2b845dc4779df0e0a1efe16f9b9e3eec8818a0e5ed46e3c.png

Watch the sneak preview of the product - launch within a few days

 

In conclusion, EasyFi protocol is a real catalyst for DeFi adoption. It is "built with the vision to solve some of the inherent challenges faced by Generation 1 DeFi solutions with respect to the transaction speed and cost which are a bottleneck for DeFi operations at scale. EasyFi is decentralized finance without any of the current dilemmas. 

 


Perry1
Perry1

I am a teacher and blockchain enthusiast.


Blockchain Innovation
Blockchain Innovation

This blog is devoted to exploring and understanding blockchain innovation and development. In particular, Matic Network is of high interest due to its scalability and 100 times reduced fees of the Ethereum Blockchain.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.