Welcome to The Next Generation of DeFi: Pledge Protocol
Fixed-rate Lending In DeFi by Pledge
With all the concern for volatility in the crypto markets, what will the future look like in the Defi space? Pledge Finance is a crypto-asset lending platform that is putting an end to one of the biggest challenges to DeFi in the form of market volatility and floating rates. Pledge Finance is offering fixed-rate medium-term loans through its first-ever collateral-agnostic loan marketplace backed by decentralized blockchain technology. Traders and non-traders can now use both tangible and intangible assets, such as cryptocurrencies, as collateral against a crypto-based loan.
This move by Pledge Finance aims at ensuring appropriate forecasting and risk management for digital transactions, imbued within the reliable, transparent and immutable framework of the blockchain. Such a solution as this will open up fixed-rate decentralized lending and will surely drive engagement with diverse debt markets and related use cases.
Augmenting a Billion-Dollar Market
DeFi, short for Decentralized Finance, is one of the fastest-growing domains of an automated blockchain-based transaction, lending and trading platforms. The extent of freedom and omission of third-party involvement that DeFi brings to the table has led to the wide acceptance and rapid evolution of the framework in no time at all, snowballing into billions of dollars.
However, the sector is in dire need of more fixed-rate lending options, as also noted by Messari researcher Jack Purdy. Fixed lending rates are poised to not just bring down the inherent volatility but also the unpredictable returns associated with fluctuating loan rates, thus attracting even those players who want in for the long term.
The current DeFi scene is far from predictable, whereas most of the existing DeFi projects are variable when it comes to interest rates, this in hard contrast to the risk averse expectations of many customers who are seeking stability. However, there seems to be a massive desire for a sustainable shift. This is what makes Pledge finance so interesting they are spearheading fixed-rate lending as their main protocol. In doing so, the platform can bring in even non-crypto assets like real estate, where investors would prefer certainty, stability and consistency.
Predictability ATTRACTS Capital
The majority of existing DeFi protocols offer variable lending rates which are inherently volatile. Predictable returns are something both lenders and borrowers highly value, and they are essential for the DeFi user base expansion. Increased adoption backed by fixed lending rates will bring increased capital to DeFi projects. This will result in accelerated growth and innovation for the industry. This is where Pledge comes in, with its primary focus aimed at non-traders looking for longer-term, fixed-rate loans. Pledge fills the need for a mature, fast and efficient crypto-asset lending platform for all.
Background Story
Built on the Binance Smart Chain, Pledge offers some impressive advantages over other Ethereum-based protocols such as its better-optimized block time and gas limits per block. It also avoids congestion, high gas fees and lack of interoperability with other ecosystems, which come with using the Ethereum blockchain. Pledge has carefully learned from the ups and downs of the current DeFi markets over the past year.
Stellar and High Performance Team
The founding members of Pledge have a stunning track record across various industries, including blockchain, real estate, financial services and cryptographic design.
Tony Y. Chan, the CEO, was the original contributor to the Windows 95 system. He then jumped into real estate for a solid 10 years. During these 10 years, he has seen some of his clients forced into liquidating their crypto for off chain assets like real estate. It was clear that many of these clients would have prefered to continue building their crypto portfolios as opposed to selling them. This is why Tony decided to create Pledge, a decentralized platform where everyone can borrow/lend money and spend it at their disposal without worrying about liquidating their crypto portfolio.
Michael Ren, the CTO, was the former CTO for one of the largest P2P lending platforms in Hongkong with an annual transaction volume of more than $10 Billion.
The advisor team included the core inventor of Prism, Dr. David Tse. He is also a professor at the prestigious Stanford University. There is also Professor Gary Lablanc, who is one of the first professors teaching blockchain courses at both UC Berkeley and Stanford. From the traditional finance world, we have Terry Tse, currently serving as director of the BNP Paribas Bank and Nicole Chang who is ex-East West Bank Senior VP, Harvard Undergraduate, Stanford MBA and JD.
Pledge’s Unique ROADMAP
From the get-go, Pledge’s goal was to target investors looking to diversify their portfolio with non-crypto assets such as real estate. Pledge foresees a future when DeFi is normalized to such an extent that it seeps into people’s daily economic activities. This will be achieved only by reducing the risk exposure and offering a real-world alternative for people to maximize returns on their assets. Pledge also intends on expanding into services like end-to-end contract agreements and real-world transactions.
Financial NFT: Generate a decentralized bond market
Later in its platform iteration, Pledge plans to utilize the unique feature of NFT to categorize different bonds, as well as yield and represent other obligations of traditional financial instruments. These instruments can be represented by their seniority status and their collateral ratio. Pledge will leverage the latest blockchain technology with ERC-1155.
N-dimensional Automatic Market Maker (NAMM)
Unlike traditional AMMs, we utilize multiple layers of smart contracts to generate a unique N-dimensional automatic market maker. This allows platform users to provide liquidity using a number of different tokens through various staking pools to generate liquidity consistently and effectively.
POWERED by PLGR tokens
Pledge is built on the Binance Smart Chain (BSC) and utilizes a duo governance token mechanism called PLGR & Master-PLGR(MPLGR) tokens. PLGR tokens represent fundamental governance on the Pledge protocol. Whereas MPLGR can dictate another set of governance of the platform, which may overrule some of the PLGR decision making . PLGR can also be explained as a utility token in the ecosystem, balancing the ecosystem and helping to encourage users to stake with the ecosystem.
The lenders earn PLGR tokens and interest by depositing crypto-currencies into the liquidity pool. The PLGR provides lenders with a relatively fixed APY. The borrowers deposit their collateralized crypto assets into the liquidity pool in order to hedge against the crypto market risks and borrow out money to carry out their day to day activities.
Cross Borders, Cross Industries
Pledge Finance also plans to bring into the picture Financial NFTs to generate and represent authority, obligations and maturity for a specific set of bonds, Pledge Finance’s exhaustive crypto-lending platform is helping gradually shape a decentralized bond market. This path of mainstreaming of DeFi will gradually lead to the technology’s penetration into daily economic activities, breaking all geographic, economic and social barriers.
Unlike traditional AMMs, Pledge utilizes N-dimentional Automatic Market Makers (NAMMs) to boost simultaneous staking between pools and ensure sustained liquidity across platforms. Built on the robust Binance Smart Chain (BSC), Pledge is powered by PLGR tokens that allow lenders, borrowers and traders to interact on the platform cohesively.
In conclusion, the primary idea on which Pledge Finance’s DeFi reform dwells is that by reducing the risk exposure associated so far with volatile interest rates, it can offer real-world alternatives that investors, traders and non-traders can use to maximize returns. The platform itself was created with the motive of facilitating simplified lending, borrowing and spending of money at the user’s disposal, without hassling over the liquidation of their crypto portfolio. With this step towards the creation of an agnostic marketplace providing these stakeholders fixed interest rates on their crypto collateral-backed loans, Pledge has moved closer to its long term vision.
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