Historical Context: The DeFi world has witnessed rapid evolution over the past years. Compound, as one of the pioneers, paved the way for many other platforms. However, like any technology, there’s always room for improvement and innovation. Enter LendeXe, a project built on the foundations of Compound but with the aim to make DeFi liquidation more equitable, transparent, and efficient. LendeXe vs. Compound: A New Era of DeFi Liquidation
Technical Differences: While Compound has a liquidation structure where typically a single individual receives the liquidation fees, LendeXe distributes these fees fairly among all pool participants. This creates an incentive for more users to participate in the pool, fostering a healthier and more stable platform.
Traditional vs. Community-Centered Liquidation: Traditional liquidation models, like Compound Finance’s auction-based model, have their limitations and might not engage the entire community. LendeXe, on the other hand, adopts a more community-centered approach with its XSD Pool. Here, users can provide their XSD Stablecoin to support the liquidation process.
How It Works:
- User Contribution: Users can provide their XSD Stablecoin to the XSD Pool specifically designed for liquidations. Through their contribution, they play a pivotal role in maintaining the integrity of the LendeXe Finance ecosystem.
- Liquidation Process: When a borrower’s position becomes under-collateralized and triggers a liquidation, the XSD Pool springs into action. The community-provided XSD Stablecoin serves as collateral, ensuring the liquidation process is swift and effective.
- Community Incentives: In reward for their active participation, community members contributing to the XSD Pool enjoy multiple benefits:
- 8% Liquidation Incentive: Users receive an 8% liquidation incentive at the end of the liquidation process as a reward for their contribution.
- LEXE Liquidity Mining: Participants in the XSD Pool are also eligible for LEXE liquidity mining rewards.
- APY Distribution: Users in the XSD Pool also receive a share of the generated Annual Percentage Yield (APY) from the XSD Stablecoin’s Yield-Boost algorithm.
A numerical example in the text illustrates how a user contributing 500 XSD Stablecoins to the XSD Pool for liquidations not only plays an active role in maintaining the stability of the LendeXe DeFi Lending ecosystem but also reaps rewards for their contribution and ongoing participation.
Numerical Example: Consider a scenario where the market is volatile, and a borrower’s position becomes under-collateralized, triggering a liquidation event.
User Contribution:
- User A supplies 500 XSD Stablecoins to the XSD Pool specifically designed for liquidations.
Liquidation Event:
- A borrower’s BTC position becomes under-collateralized due to market fluctuations.
- The XSD Pool, with the community’s supplied XSD Stablecoins, aids in the liquidation process.
Outcome:
- As a result of the successful liquidation, User A, who contributed 500 XSD Stablecoins, receives a reward.
- The initial 500 XSD is used in the liquidation, but User A receives an 8% liquidation incentive. This means User A gets 540 XSD back (500 XSD + 40 XSD as the 8% incentive). The other 2 % goes to the Reserve Factor => Ultimate Loan & Stabilizer.
- Additionally, User A becomes eligible for LEXE liquidity mining rewards and also receives a share of the generated APY from the XSD Stablecoin’s Yield-Boost algorithm.
In this scenario, User A not only played an active role in maintaining the stability of the LendeXe DeFi Lending ecosystem but also earned rewards for their contribution and ongoing participation. This example provides a clear picture of how a user can benefit from participating in the LendeXe Liquidation Pool.
Community Engagement: LendeXe firmly believes in the power of the community. We are on the verge of introducing a Zeronomy where everyone can contribute. Our initial test run will take place on Shimmer. If successful, we will roll out the update to Ethereum and other mainnets.
Economic Benefits: By distributing liquidation fees fairly, all pool participants benefit, not just a few. This not only encourages participation but also ensures every user is rewarded for their stake in the system.
Safety Measures: With the introduction of XSD as a security concept, LendeXe will be able to conduct liquidations more efficiently and securely. Instead of relying on external means like Ethereum, XSD allows for a fully automated, on-chain settlement of liquidations, especially during volatile market movements.
Future Plans: LendeXe has grand plans for the future. With the impending introduction of the Ceronomy and the continuous evolution of our platform, we aim to revolutionize the DeFi world and create a more equitable and transparent environment for all.
In conclusion, we’d like to emphasize that LendeXe has now evolved into its own code base and concept. We’re no longer just a fork — we are LendeXe. Congratulations to our growing community, and thank you for your continued support!
Useful Links
Website . Whitepaper . Twitter . Discord . Telegram
Disclaimer
The information in this document is of informational nature only, can be subject to change or update without notice and should not be construed as a commitment by any entity operating LendeXe protocol (hereinafter: “LendeXe”). This document, and parts thereof, must not be reproduced or copied without LendeXe’s written permission, and contents thereof must not be imparted to a third party nor be used for any unauthorized purpose.
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With the development of the LendeXe platform, protocol and/or any mobile applications may be amended in the following. Please also note that LendeXe project and/or protocol itself may be redesigned or otherwise revised in future, if that would be required for any material reasons (including, but not limited to: commercial considerations, technical possibilities, or the need to ensure compliance with any (existing or future) applicable laws and regulations, or any other material reasons). LEXE tokens are not intended to constitute securities in any jurisdiction.
This document does not constitute a prospectus or offer document of any sort and is not intended to constitute an offer of securities or a solicitation for investments in securities in any jurisdiction. The contents of this document are not a financial promotion. Therefore, none of the contents of this document serves as an invitation or inducement to engage in any sort of investment activity.
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