Introducing Finterest (Twitter Space recap)
This is a general recap of what was discussed in the first official Finterest live discussion.
What is Finterest?
Finterest is a decentralized lending protocol on The Internet Computer blockchain. It aims to provide a trustless, secure DeFi service to users looking to lend and/or borrow Bitcoin, along with other assets like ICP.
The Finterest Team
The team is composed of four experienced developers all firmly entrenched in the world of web3. Finterest is a product demonstrating their collective expertise in DeFi.
Co-founders Carl and Olliver have already proven their abilities to develop and market successful DeFi protocols. They are founding developers of Cheese Game, a gamified risk protocol on the ONE Harmony blockchain, where users can participate in an NFT-based game of cat-and-mouse, where players can lose or win extra yield, in true crypto-native degen fashion.
Rounding out the team is Austin, Finterest’s UX/UI developer, who also comes from a DeFi-heavy background. He has over 10 years of experience in the UI space.
The team decided to build Finterest on the Internet Computer because of its unique technological advantages such as: Chain Key cryptography, the unlimited possibilities afforded by canisters (which can be used more like software, unlike traditional smart contracts), and true decentralization, among other features which make ICP the ideal blockchain for fast, trustless code implementation.
Everyone in DeFi understands that the current methods of wrapping and sending assets over a bridge involves significant risks (as evidenced by bridge hacks of ever-increasing sums). The upcoming native Bitcoin integration on the Internet Computer will eliminate such vulnerabilities. Security is an integral reason that the Finterest team has chosen to make their home on ICP, and Finterest is working directly with DFINITY developers to create a secure and safe DeFi protocol.
How will Finterest deal with potential legal compliance issues?
The Finterest team is in early talks with lawyers for proper legal counsel regarding tokenomics and initial launch layout. There is also a plan to create a DAO in the near future, which will allow for more legal freedom in operations and feature releases. The team will do due diligence to comply with the law and to uphold the financial security of Finterest users.
What is the expected demand for collateralized lending on ICP?
In one word: Big.
Bitcoin’s main utility is as a passive investment vehicle. According to crypto analysis service Glassnode, close to 64% of Bitcoin has not moved in over a year as of time of writing.
In other words, lots of people buy Bitcoin and simply hold it because there is no safe way to utilize it — wrapping and moving Bitcoin over to a different blockchain to participate in lending is something that Bitcoiners just don’t do. However, ICP’s native integration means that Bitcoin will stay on chain, avoiding the security pitfalls that have become more prevalent over the past year. This will encourage Bitcoin holders to participate in DeFi like they’ve never been able to before. Obviously this will be mutually beneficial to those holding Bitcoin as well as the Internet Computer ecosystem, as it will bring public attention and fresh capital to the ICP blockchain.
Pertinent to long-term ICP investors (the “8-Year Gang”) is the future capability of earning profitable yield by using NNS-staked ICP as collateral with Finterest. Much like with Bitcoin holders, this will be a game changing investment option for those who believe in ICP so much that they are willing to reject financial opportunity costs for the duration of their stake.
Will Finterest be issuing a stablecoin?
No, nor are there any plans to create one. However, Finterest is in talks with DFINITY to use Cycles for the initial launch (Cycles are ICP’s native “stablecoin” — best understood as a commodity to power canister smart contracts, and pegged to the IMF’s SDR in monetary value).
The team is also in talks with Psychedelic for the possibility of using an Eth-bridged stablecoin (like DAI or USDT). Finterest will make relevant info updates to the community as needed.