Decentralized finance (DeFi) is very much the trajectory of the future
As we anticipate another interesting move in that direction with the forthcoming release of smart contracts on Cardano’s ADA on September 12, interest in DeFi has got to very high levels, approaching somewhere near an all-time record.
Just 7 days ago, BENQI entered the DeFi liquidity protocol market with its Avalanche-powered platform, which allows users to lend, borrow, and earn interest using their crypto asset.
This is another example of a multi-use solution which creates a lending pool from deposited assets, and allows a passive income, something CoinMetro is an advocate of and a leader in, given CoinMetro’s XCM staking program which gives a passive income to participants.
This type of decentralized solution that allows participants to earn as well as be part of a new multi-faceted financial service is showing its popularity, as here we are, 7 days after BENQI’s launch, and it is already up to $1 billion in total value locked (TVL).
When businesses approach lending brokers these days, they are often told that banks with their traditional underwriting and conservative risk management criteria are no longer the main choices for lending to companies for the purposes of expanding their business, providing operating capital or for the purposes of business sustainability as per the recent lockdowns across the world throughout which many firms have had to borrow money to survice.
These lending brokers will often openly tell commercial borrowers that many loans today are created by ‘fintechs’ and not by traditional lenders, therefore this is a very lucrative market to be in as a DeFi.
The Avalanche smart contract platform has expanded that area of digital financial services functionality, and has become very popular to the point of Cardano, its blockchain system, being very much in favor at the moment, and Pangolin which is another DeFi protocol focused on decentralized exchange services, having gained over $320 million in TVL.
Avalanche is up 10% in the past 24 hours to $51.38 per token as of 10:30 a.m. EDT today. The token has more than doubled in the last week.
The age of smart contracts and decentralized liquidity is most definitely here!