Integrating Financial Services into One Groundbreaking Platform: A New Dawn of Blockchain Lending with Nolus
DeFi has made significant strides towards being a blockchain-based technology that offers a system of financial rails parallel to traditional financial infrastructure.
To scale up the digital innovation ecosystem and give new momentum to fintech, financial projects are figuring out how to integrate next-generation technology with finance. New technologies such as 5G, cloud, big data and AI are breaking new ground in finance by leading humanity into a new era – from connecting individuals through connecting things to developing a fully connected, intelligent world. As the world enjoys these intelligent systems and smart homes, the financial sector is reaping from intelligent computing and automation capabilities through blockchain technology.
Blockchain-born decentralized finance (DeFi), an emerging and exciting financial technology that gives centralized finance a run for its money. DeFi builds the future of finance through a new and innovative financial infrastructure, moving away from the existing financial one used by traditional finance (TradFi).
DeFi is on the rise, with new financial models emerging in this ecosystem every day. Thanks to DeFi, we have investment tools like liquidity mining, staking and DeFi loans. Decentralized centers i.a. How is DeFi able to sustain this growth trajectory?
Decentralized finance as an ever-changing and ever-growing space
DeFi is a blockchain-based technology that is at the forefront of fundamental change in finance through the facilitation of entirely new financial products and services that reduce reliance on legacy gatekeepers and TradFi industry stakeholders. Let’s briefly explore DeFi’s transformative effect on finance today.
DeFi Lending/borrowing and DeFi Staking
One of DeFi’s most common uses is in protocol-specific money markets. Users can borrow, lend and stake crypto assets by providing liquidity to a chosen protocol in different types of collectivized liquidity pools.
One issue in DeFi lending that most investors are wary of is over-collateralization of digital assets. Excess collateral raises the question, why don’t users receive the amount equivalent to what they give as collateral? The answer to this is that protocols must be kept safe so that they do not become insolvent, and because of this need for security, the aforementioned protocols offer loans with overcollateralization. Unsecured loans actually exist as an option. They ease the burden on borrowers and allow lenders to get more for the added liquidity due to higher utilization levels. . Undersecurity is preferred as it is more user-centric and provides better economic efficiency.
Currently, on-chain sub-security also comes with a few trade-offs, such as some implementations relying on trusting the borrowers, causing the protocols to only whitelist certain borrowers or even limit the eligible set of both lenders and borrowers. Such a solution is not without permission, and in order to rid the lending ecosystem of this obstacle, Nolus goes a notch higher by:
- Enables the borrower to get more than they give;
- Comes up with a completely permissionless function where there are no restrictions on who can be a lender or borrower.
Decentralized exchange platforms
A decentralized exchange (DEX) is a peer-to-peer marketplace that connects crypto buyers and sellers that are non-custodial, i.e. a user remains in control of their private keys when trading on a DEX platform. Since no central authority controls DEXs, the platforms distribute self-executing smart contracts according to their stated terms and record each transaction to the blockchain.
In addition, we have standalone DeFi projects with new technologies built into them that are changing the financial scene in themselves. One of these projects is the Nolus protocol, which brings the world’s first DeFi Lease to decentralized finance.
The Nolus protocol pioneers innovative changes in DeFi
As an upcoming Web3 finance package, Nolus brings innovative money market approaches with its unique lease solution to further innovate the DeFi space. They have an inclusive, intuitive and user-friendly solution to boost mainstream adoption of DeFi. The goal is to merge TradFi and DeFi using a holistic approach that leverages various financial tools and the benefits that decentralized finance brings to the table.
Leasing/lending at Nolus
The protocol incorporates traditional lease financing into DeFi Leasing by bringing a solution that most people are used to – buy now, pay later. Without requiring users to be financial experts, they can secure a larger amount of a desired digital asset than their current equity balance without worrying about hard margin call formulas or complex lending fee structures.
Fiat on ramping is a proposed part of the Nolus DeFi lending mechanism, a work in progress, where users can exchange fiat currencies for crypto. At launch, users will be able to benefit from this DeFi Lease solution. When the fiat-on-ramp is executed on Nolus, users can transfer fiat or crypto from a bank account/debit/credit card/crypto-enabled wallet, make a down payment in the desired amount, and approve the smart contract.
With the Nolus Defi lease, users have full freedom to adapt the parameters of the chain contractual agreement.
Some key features of DeFi Lease include:
- Financing up to 150% on the first investment.
- 40% lower liquidation rates compared to the market average.
- Total costs for financing and transactions are low.
- Ownership lies with the user.
- Self-paying loan mechanisms.
Integrating divergent financial services into one platform contributes to the growth and use of DeFi
The widespread proliferation of DeFi technologies, such as the Nolus protocol discussed above, is giving rise to a new paradigm of financial products and services leveraging blockchain and tokenized digital assets. Users can use DeFi as an investment tool to access other financial instruments such as lending, betting, derivatives trading, loans or even Nolus’ new DeFi Lease solution.
To learn more about Nolus and its unique products and services, visit their social media:
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