A prelude to Fuse.
Enabling true superfluid collateral and margin on any asset
I want to use my house as collateral to borrow dollars. I want to use my computer, my Twitter account, even my leveraged Alpha positions to borrow dollars. Banks can support the first but lack the ingenuity and the infrastructure to support anything more.
Fuse is a solution that would enable anybody to borrow against all of that, and quite literally anything else. There’s this idea called superfluid collateral, the idea that anything that has value can be borrowed against. Yet, we’re limited by central institutions (the banks) approval of collateral. Even many of the DeFi institutions, which have undoubtedly made significant strides against the central banks are constrained by asset risk. Maker, Aave and Compound are limited because they want to de-risk their users, but it is constraining the pace of innovation.
Fuse fixes this. Fuse enables anyone to create pools of assets which are their own distinct money markets (custom curves, oracles, etc). Fuse will begin supporting any asset tradable on Uniswap. Over time, Fuse will expand to support everything from traditional TradFi collateral types like mortgages all the way to innovative collateral types like my tweets (Cent is tokenizing tweets!).
The possibilities with a product like Fuse are enormous. For all my degenerates out there, it means leverage on any asset — further leverage on something like Alpha Homora positions. The goal will be to eat up all blockchain-based value (and eventually all value) and put it inside of a Fuse market. For everyone else, it means increased capital efficiency and a bank-like mechanism. No more credit scores plagued with systemic racism, no more stupid bank appointments, none of that. This is the future. It can be thought of a market of money markets, if you will. Rari Governance Token holders will manage the protocol and facilitate future upgrades.
I am really excited for this. I am really excited to share more in the coming weeks. We’re internally playing with it on testnet currently. We’re gearing up for a private alpha and hope to publish it publicly in the coming weeks.
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