The traditional finance market is centralized. Central authorities issue the currency that powers our economy. Centralized financial organizations, e.g., banks, control our assets. Hence, the ability to regulate the flow and supply of such currencies in the market resides with a central authority. Risk is also at the center. The centralization of authority and practice across the financial system has led to a potentially unmanageable level of complexity. Complexity at this magnitude creates risk. Unchecked risk will increase creating new vulnerabilities. This coupled with a lack of transparency compounds the problem. For example, if central banks print more currency to handle a financial crisis and it does not resolve the crisis, it may result in extreme inflation disrupting an entire economy. A potential solution is to decentralize.
Decentralized Finance (DeFi) refers to financial products and services that replicate traditional financial offerings by leveraging the trustless and transparent platform of a blockchain. DeFi is an alternative to traditional loans and mortgages, and can be accessed by anyone with a smartphone and Internet connection. Common examples of DeFi include cryptocurrencies and digital assets, smart contracts, crypto lending and borrowing, trading, insurance, derivatives, payments, stablecoins. Since governments and financial institutions have a monopoly over almost all financial products and services, the concept of DeFi was considered revolutionary, with some expecting DeFi to become the future of banking.
While the cryptocurrencies are decentralized, they are typically accessed via centralized access points such as exchanges. So how will we move towards decentralized finance? From stable coins, decentralized exchanges and wallets to payments networks, lending and insurance platforms, key infrastructural development, marketplaces, and investment engines the decentralized finance (“DeFi”) ecosystem is the way forward. DeFi utilizing technology implemented using a blockchain-based ecosystem will provide the user with full control of their assets. It will add transparency, stabilization, and efficiencies to global finance. DeFi also referred to as “open finance” is an ecosystem where blockchains, digital assets, open protocols are integrated with conventional financial structures. DeFi includes smart contracts, and distributed applications (“dApps”) built on a blockchain. Currently, the Ethereum platform is the primary choice for the DeFi. Why: because many dApps have been built using Ethereum and Solidity smart contracts so there is a large pool of talented developers. Additionally, these development projects breed composability. A DeFi platform is composable if its existing resources can be used as building blocks and integrated into higher order dApplications. Composability leads to rapid and compounding innovation. The fact that most DeFi protocols are open source, i.e., freely available, developers across the globe can collaborate to create new products leading to innovation, maturation, and a secure network. Composability creates the MetCalfe “network effect”, i.e., the value of goods or services grows as the number of users increases.
yLEND protocol is built on Ethereum platform that will allow users to lend, borrow $eth or other tokens and earn algorithmically set interest rates, additionally double their earnings with farming functionality which is one of a few in DeFi.
There are many lending protocols available on the market, however their interest rates are only based on the ratio of lenders and borrowers. Usually, the interest rates are very low because of low number of borrowed amount. yLEND aim to solve this issue and maximize your earnings by offering farming functionality.
Lenders will earn two types of APY = APY and yAPY
Standard APY will be algorithmically calculated based on supply and demand.
yAPY stands for the earnings from farming as yield earnings in yLEND tokens. This will allow lenders to earn high interest rates even if there is a low demand for borrowing which is missing in many lending protocols.
Borrowers will also earn yAPY on the amount they collateralize to borrow. This sounds interesting, right? You earn money even when you borrow thanks to yLEND ecosystem.
yLEND is also a governance token that will enable users to adjust the interest rates and make important decision towards the development of the protocol.$yLEND is a governance token of yLEND protocol. One the core features of $yLEND is the ability to vote for the changes and development of the protocol. User will be able to decide distribution rate of $yLEND tokens, buy back and distribute or buy back and burn rates. All of these features will be programmed into our smart contract, votes will be automatically counted and changes will be made if any.
yLEND protocol offers
yLEND protocol offers a new generation of crypto lending and borrowing protocol with farming opportunities. For provided liquidity users will earn standard interested rates and additionally yield earning from farming.
$yLEND is a governance token of yLEND protocol. One the core features of $yLEND is the ability to vote for the changes and development of the protocol. User will be able to decide distribution rate of $yLEND tokens, buy back and distribute or buy back and burn rates.
Borrowing will be available on the collateralized amount from provided liquidity. Borrowers will also earn daily yield earnings based on the collateralized amount as yLEND tokens.
yLEND development fund is one of the important part of the project. It is aimed to maintain the success of the project. Initially 500 eth (1/3) from pre-sale will be locked in the fund. Gradually, users will decide how to use these funds by voting. The main use case will be buying $yLEND tokens from the market and burning or distributing among the protocol users.
$yLEND holders will be able to stake their $yLEND holdings and earn profit by locking their funds. The vault is designed to incentivize hodling the $yLEND tokens and maintain the sustainable price growth.
Another exciting add on of yLEND protocol will be elastic supply token $yLUSD to maintain sustainable growth of the ecosystem. $yLUSD will follow the Ampleforth elastic supply models and it will expand and contract supply in response to market conditions, to target 1 USD per $yLUSD.
For more information please visit links:
Telegram channel: https://t.me/ylendio
Telegram group: https://t.me/ylendgroup
We published yLEND Lightpaper. You may read it on Medium. https://t.co/aczUD7CQoL
— yLEND (@ylendprotocol) November 6, 2020