OIN Finance deep dive into how to use stNEAR as collateral.
This week we shared with all the Meta Pool community of an NFT Giveaway that we are organizing with OIN Finance. You can read the details here.
Now we want to help the OIN and Meta Pool community understand our perspective on how this partnership will work and have a glimpse into the future of what we believe can be the kickstart of an active DeFi ecosystem on NEAR Protocol.
Stablecoins are key for Lending and borrowing on DeFi.
Many of you know of the different lending and borrowing solutions such as MAKER, AAVE and Compound, just to name solutions that have set the standard in the crypto space. These platforms have been fundamental for the growth of the Ethereum ecosystem and have been without a doubt very successful ventures in the industry.
At their core, these platforms enable users to deposit assets such as ETH or WBTC and take out over collateralized loans for the value of their holding.
A key component for DeFi platforms are stablecoins, whether people are using Defi platforms to leverage or to access liquidity, there is strong demand for stablecoins as they are the prime asset people use in lending and for providing liquidity.
As we draw lessons from these platforms that have become the cornerstone for an entire blockchain DeFi ecosystem, it becomes clear that in the NEARverse there will be a platform that will have to pave the way in order for the DeFi users to come and provide liquidity to digital assets built on top of NEAR Protocol.
That is the reason we have partnered with OIN Finance, so that stNEAR token holders can leverage the digital asset as collateral to receive a stablecoin and participate in any NEAR platform not just DeFi; for example they could buy NFTs in Paras and Mintbase or support creatives with their tokens.
On OIN Finance V3, stNEAR token holders will be able to collateralize their digital asset and receive stUSD from the platform. Which can then be used to provide liquidity to pools on Automated Market Makers such as Ref Finance (still not supported).
If you are new to the ecosystem and stablecoins, we would suggest looking into this video from the Chain Link Live podcast.
Some of the advantages that OIN Finance provides to stNEAR token holders that will be providing collateral is:
- Less than 1 second transaction times
- Less than 1 cent transaction fees
They will soon be launching their V3 platform in just a few weeks with some exciting features, such as supporting stNEAR as collateral :)
Understanding the dynamic of using stNEAR as collateral.
Many members of the Meta Pool community have been looking to start using their stNEAR tokens. Right now there is a pool on Ref Finance, but we did not want to stop there. As we wrote before of the importance of stablecoins for any DeFi ecosystem, we want to showcase how the partnership can help stNEAR token holders.
Please be aware that this is not financial advice and that each person will need to review and do their own research in order to engage with any DeFi platform.
We would like to illustrate how a person (Maria) can collateralize their tokens and engage with OIN Finance.
Example: Use Case for stNEAR as collateral.
Note: this is just an example and does not reflect the actual numbers of the market, we are also assuming that there is an AMM called MATE offering a stNEAR <> stUSD pool.
- Maria has 120 stNEAR to use in DeFi platforms
- Now Maria deposits 70 stNEAR on OIN, she can now borrow 400 stUSD
- With the 400 stUSD, Maria goes to the MATE platform to become a liquidity provider
- Maria provides 50 stNEAR and 400 stUSD on the MATE pool, to become an LP
- MATE provides an LP token
- Maria deposits the LP in the stNEAR-stUSD-LP farm
- Now Maria is generating profits from her deposits in 3 ways:
- NEAR Staking rewards in Meta Pool
- $META tokens for participating in Meta Pool
- MATE tokens rewards and swap fees
This is just a happy path on how the partnership will enable more value for NEAR token holders and also Meta Pool stakers.
We are in the early stages of building the DeFi ecosystem on NEAR and we want to celebrate this with all of you. We understand that we are alpha-beta testing most of the platforms that we are building, so please do your own research and do not take anything written as financial advice.
Join us this October 9th for an AMA our Discord Server at 5pm CEDT, here is the link to become part of the Meta Important Poolers (MIPs) — https://discord.gg/rXpha2KpEH
So participate in our NFT Giveaway, let’s have fun and keep on staking!
