How LEND intends to unify a $50 billion market
Decentralized Finance (DeFi) has opened new possibilities for maximizing the income your assets generate by creating a permissionless and strictly peer-to-peer system to interact with. Among all of the decentralized applications (DApps), Lending platforms see consistent growth rate regardless of market conditions.
In this article, we’ll focus on how the inefficiencies found in current DeFi protocols are being reshaped by the latest development of the LEND platform. With our newly seamless cross-chain lend & borrow markets, LEND will streamline DeFi as we currently understand it. Users will earn “real yield” seamlessly, cross-chain, with the LEND protocol.
📖 What is the LEND platform?
LEND, is a seamless cross-chain DeFi lending platform.
With LEND, users will be able to know they are safely maximizing the earning potential of their crypto assets and savings.
Users can interact with the protocol in a few ways; Deposit crypto assets to earn competitively high interest, similar to a traditional savings account. Or use their crypto assets as collateral to borrow other assets.
The LEND DeFi lending platform provides opportunities for crypto holders to passively earn interest for supplying liquidity to facilitate borrowing requests. While also allowing crypto users to instantly access on-chain liquidity without jumping through rigorous hoops. The lending process is executed from the start until the finish automatically by the protocol without 3rd party intermediaries.
DeFi lending aims to make deposited assets work for the owners to earn passive yields. On LEND users will send the assets they intend to lend into one of the LEND money market pools using a smart contract.
Once the assets are sent to a LEND smart contract, they become available to other users to borrow. Afterwards, the smart contract issues tTokens automatically to the lender. The tTokens accrue interest and can always be redeemed at a later stage in addition to the underlying assets that were sent to the smart contract.
With LEND’s new cross-chain development Lenders and Borrowers are able to take this a step further by allocating collateral to open the ability to access instant liquidity on any chain.
Why is LEND being Cross-Chain so exciting?
As of FEB 2 2023, there is close to $50 billion TVL fragmented across many chains within DeFI. So far all protocols still share one common inefficiency; they are only available through the native chain or have some basic multi-chain functionality. Making it impossible to provide and borrow assets across various blockchain ecosystems without requiring 3rd party bridges.
Traditional lending platforms like Compound are restricted to single chain creating a dashed experience if user wanted to take advantage of lending or borrowing opportunities on any other chain.
LEND aims to unify this $50 billion fragmented market by making it possible to borrow and lend assets between various chains seamlessly at the click of a single button. Increasing the availability of borrowing capacity expands the lenders’ opportunity to earn interest. Borrowers will also benefit from having easier access to a wider choice of lower borrowing rates from multiple chains — again with a single click. All thanks to LEND.
Advantages of a cross-chain lending platform:
- Enable borrowing and lending of a wide range of assets across different chains.
- Easier access to liquidity cross-chain means the platform will generate more revenue and share this with our $LEND token stakers and lockers.
- Increases the borrowing capability thus increased interest earning potential for the lenders.
- Enables borrowers to take advantage of cheaper borrow rates on different chain.
For example:
A user having deposited USDT on BNB Chain wants to borrow BTC. Borrow rate is directly dependent on the borrow rates of the market. Now the user has the option to compare the different borrow rates available on the respective network without transferring his original asset. Creating freedom to borrow at the preferred interest rates and unifying all chains as viable options.
🔒Is cross-chain lending Safe?
The sustainability, safety and overall longevity of the LEND protocol is something we’ve kept in mind since day one. We aren’t aiming for overnight success, we’ve been building our ecosystem for over a year and aim to lead the way in the DeFi lending sector.
With LEND we really wanted to ensure protocol safety from any adverse events. To protect our users and ourselves we have adopted a risk mitigated approach to all aspects of the platform.
The LEND platform will still require over-collateralization. So borrowers will only ever be able to borrow less than the liquidity they have provided. The health of open collateral ratios is constantly monitored by the protocol and if a borrower becomes under-collateralized they will be subject to liquidation to make the original Lender whole again. This ensures optimal protocol health and secures lenders’ deposits so they can earn safely with peace of mind.
There can be three different scenarios of liquidations:
1️⃣ On chain Liquidation:
If the user account gets illiquid on parent chain the the Amount that will get seized by the user is ( Total Deposit — Deposit Assigned to cross-chain borrow)
2️⃣ Cross chain Liquidation:
If the user account falls into liquidation on cross-chain borrowed amount then only the delegated amount to the cross-chain borrow will be seized.
3️⃣ Liquidation on both the chains:
Total amount will be seized if the users total amount get illiquid.
Liquidation process remains the same and can be performed by any outside entity or automatically by the protocol when checking borrowing health.
🛡 Security Audits
The LEND platform is policed by Smart Contracts, a set of codes that regulate and enforce a system that guarantees similar results every single time. These contracts have been audited by industry experts and reviewed again with any major update.
✅ The the audits for yourself:
https://bit.ly/3HyU3ET
https://bit.ly/3Y2useO
How will $LEND tokens benefit from this cross-chain update?
LEND tokens are the native tokens at the centre of the LEND ecosystem and the key to earning seamless cross-chain income from the LEND protocol. LEND tokens are earned as a bonus for supplying assets or borrowing from the protocol. These tokens can be used to claim up to 25% of the total revenue generated from the protocol.
One of the advantages of using a totally cross-chain model is that the interest rate can vary from chain to chain depending on the supply and demand. Because of this, users will now have access to one-click borrowing on multiple chains; they are free to compare the borrowing rates and select the cheapest chain to borrow on.
Similarly, users also have access to one-click lending on any chain. Encouraging higher volume through easier access to earning opportunities from any chain. This increased accessibility for both Lenders and Borrowers means that anyone can supply or borrow funds completely cross-chain meaning more revenue will be going back to LEND token stakers or lockers.
You can learn more about LEND tokens in our guide here:
FAQ’s About Cross-Chain Lending:
Q — Is the total deposited amount always available across the chain for borrowing?
A — No the deposited amount will be only available on the respective chain. Suppose if BUSD market has 100K BUSD on chain A and 200K on chain B. Then amount which can be borrowed from chain A will be limited to 100K
Q — Is there any additional fees which user has to pay?
A — Except transactional fees no other charges will be levied on the user. The transaction fee required to conduct off-chain request will be deducted from the principle amount.
Q — Can I use my funds in case of partial payment for cross-chain borrow?
A — Yes, with the subsequent repayment equivalent amount will be released by the protocol to be used by the user.
Q — Can I repay the borrowed amount in different chains?
A — No, borrowed amount can only repaid on the same chain.
Q- How will Repayment of the Loan -
A — Repayments of loans remain the same as in traditional platforms. In cross-chain repayment the amount can only be repaid in the borrowed chain. Once the amount is repaid , the funds used to initiate the cross-chain borrow are released.
Q — How can I claim my borrow rewards ?
A — Connect to the respective chain and claim the rewards.
✅ Conclusion:
As you can see, the cross-chain developement of the LEND ecosystem creates easier access to opportunities for creating additional streams of revenue! All of these new cross-chain utilities will be used to streamline the DeFi experience as we understand it and potentially unify $50b of assets currently fragmented across many chains. Users will be able to benefit from this with $LEND tokens to earn “real yield” seamlessly, and totally cross-chain.
❤️ Thanks for Reading!
We hope this guide serves as an important introduction to the LEND ecosystem and each reader understands the fantastic capabilities of LEND tokens. We will continue the #LearnToLEND series to make sure everyone, from DeFi experts, to Crypto noobs can understand LEND and start to #LENDtoEarn.
📚 Continue learning about LEND:
https://lend.gitbook.io/home/
As we continue to prepare the protocol for launch make sure you’re following all LEND Finance social channels to be the first to hear news, updates and fantastic opportunities in our $120,000 pre-launch events.
✅ Follow the Official LEND Socials:
🌐 Website | 💬 Telegram | 📃 Medium | 🐦 Twitter | 📢 News Channel
