Lending and borrowing platforms are nothing new for crypto and have found a lot of success over the last few years. The IQ Protocol is a new and innovative addition to this space, developed by the team behind Parsiq, a blockchain monitoring and automation platform which seeks to connect blockchain activity to the real world, often referred to as a "Reverse-Oracle".
The IQ Protocol differentiates itself from other lending and borrowing platforms in many ways, the biggest difference being the kind of loans that are available. The main idea of the IQ Protocol is that of "utility loans", instead of borrowing stablecoins, etc. you borrow utility tokens in order to gain access to certain services. As of right now the only available utility token is Parsiqs own PRQ token, although that may change very soon as they've already announced one upcoming addition and hinted at many more.
Another big way in which it differentiates itself from other borrowing and lending platforms is how it actually works, whereas with other platforms you provide collateral to get a loan the IQ Protocol takes an entirely different approach which likens itself more to a subscription service. The tokens you borrow don't come in the form of their original tokens but rather in the form of an NFT which represents the tokens you borrowed, a wrapped token of sorts, and comes with an expiration date of your choosing. This means that the tokens within in the lending pool never actually leave the lending pool. What this allows for is borrowing without collateral as there's no risk involved on the lenders side, all you need to do is pay a small upfront fee like you'd do with a regular subscription service. One advantage over regular subscription services however is the ability to get a refund, sort of. The way this aspect of the platform works is that the fees you paid are distributed over time instead of all at once. The first week will see half your fees distributed, the next week a quarter, the next week one eighth and so and so forth. So if for example one week after getting a loan you decided you didn't need or want it anymore you'd be able to get half the fees you paid back, similarly if you borrowed too many tokens and noticed immediately you'd be able adjust your loan and get those fees back.
To give an example of how the IQ Protocol would work for services other than Parsiq we can take a look at a possible example given to us by the team behind Mysterium Network, a dVPN service.
Alice wishes to run a node and earn 10 DAI a day. For this she needs to stake 1000 of MYST, the token of the Mysterium Network, instead of buying the tokens directly she can borrow them through the IQ Protocol for a comparatively low fee of 0.3 DAI a day. Now all she needs to do is run her node, stake the borrowed MYST which in turn allows her to start earning up to 10 DAI a day by being a node runner. Below is a handy illustration of how this procedure could work. You can also read this blog post or watch this video for a more in-depth explanation.
There's a lot more that goes into the IQ Protocol but I'd recommend actually reading about that straight from the source because I'm not that smart of a person and I would not be able to explain it all. You can find basic explanations of it here, plus here, a more in depth explanation here and very in depth explanation right here. Another thing that I should mention is that there's currently an incentive program going on for people who stake PRQ by giving those who stake from now until the end of this year a share of 1 Million PRQ and a possible airdrop of the IQ Governance Token for early adopters which anyone who stakes now would be as far I know.
P.S. If you'd like to donate some Monero to me you can do so with the address below.
89HpCccG5AESAY5xcF3EXSSDeRGSgZyFRB2ZTaV5WsRYRfUdzVRdYH8WxcUHfmZsegEAqypzdT7vAMaJ4AcL3FowSvogCew
