Introducing Lendefi, an innovative DeFi protocol that allows lenders to securely lend their stable coins and earn interest. Borrowers can access UCLs to invest in crypto-assets and grow their portfolios. What is Lendefi (LDFI) | What is Lendefi Finance (LDFI) | What is LDFI token
In this article, we'll discuss information about the Lendefi project and LDFI token
The Decentralized Finance (“DeFi”) ecosystem has grown exponentially over the past year and has started to unlock a new era for modern day financial products and services. DeFi provides an infrastructure harnessing the power of blockchain solutions to enable robust and modern financial solutions. DeFi products will replace almost all contemporary financial services, including savings, insurance, trading, and loans.
The early innovation in DeFi with multiple major platforms like Compound, AAVE, bZx, have paved the way for the adoption of crypto lending and borrowing. However, the problem with these earlier offerings is they are often overcollateralized and/or targeted towards margin trading, hence intrinsically very inefficient in their usage of capital and creates a barrier to entry for the everyday mum and dad lender or borrower.
Image Source: Loanscan
Therefore it is evident the most compelling use case of DeFi is Undercollateralized Loans (“UCLs”), which are needed now, more than ever before, given the rapid rise of crypto into the mainstream with tech giants such as Facebook and PayPal now participating.
The simplest way to understand a UCL is by using an analogy to real estate ownership via a mortgage loan. Welcome to the world of UCLs — imagine only putting up that fraction of the house’s value equivalent as a deposit and getting a mortgage to finance the rest instead of paying the entire value of the house yourself. When you wish to cash out the gains from your investment, you can sell the asset and walk away with all the profits after paying the bank the borrowed funds and interest.
Now, imagine taking a loan to purchase a crypto asset such as BTC, ETH, UNI, LINK, AAVE or YFI. Say, for instance, that BTC is worth $20,000, but you only have $10,000 to invest, and would like to purchase a whole BTC rather than half of one. But if you walk into your friendly local bank and ask for a loan to purchase BTC, they will of course, flatly refuse you.
What now? Your more prudent option would be to take out a loan from a blockchain-powered platform that offers UCLs. But who will lend the money to you, and why would they?
The interest that people receive in the traditional banking system is nearly zero, or even going at negative rates in multiple countries, where customers have to pay the bank to hold their money, which is a complete utter fallacy. This leaves people with little, or no secure lending options where they can earn attractive rates of interest on their money. While it is easy for anyone to borrow money from the bank to buy assets like cars and houses, there are few options available for the borrowers to invest in crypto assets. This major gap in the market remains untapped, and Lendefi are bridging this gap in the market.
The Lendefi protocol (the “Protocol”) allows secured lending, giving the much-needed confidence to the lenders in a highly volatile crypto market. Secure lending options will open up lending opportunities for traditional and private lenders to access higher interest rates without getting direct exposure to the crypto market fluctuations.
Lendefi protocol cuts the middle-man out of the lending process and eliminates the red tape involved with the lending and borrowing. This removes any counterparty risk between the borrower and the lender, who then can deal on a trustless basis.
The lender will receive a variable interest and be secured by the liquidity provided on the DeFi ecosystem in such protocols as Uniswap . Hence, if the borrower is not able to maintain their loan, the Protocol will ensure the lender is repaid and the borrower credited with the remaining equity.
Borrowers can select from a wide variety of supported assets to invest by borrowing funds from the Protocol. Supported assets can be added and removed via Lendefi’s decentralized governance mechanism (the “DAO”).
The base currency for lending and borrowing is USDC, hence making it more user-friendly and fostering mainstream adoption. Lendefi has specifically chosen USDC because it is the safest stable coin from a custody and reputation perspective, given it is a collaboration between Coinbase and Circle, and undergoes regular audits and is subject to regulatory compliance.
From a technical perspective it works like this:
Security issues have plagued many lending platforms in the DeFi space where exploits related to ‘flash loans’ have been a common occurrence. Platforms are resorting to offering higher yields (see https://defirate.com/lend/) in order to re-attract lenders. In reality these aggressive tactics are a simple case of “high risk = high return”. _Lendefi _ addresses this issue by escrowing the borrowers investment asset (the “Asset”) within the Protocol itself, therefore negating exploits that allow withdrawal of the Asset by a hacker. The result is less risk for borrowers and lenders, in turn providing further confidence in the Protocol as compared to other DeFi lending platforms.
It may be cliche to say “crypto shouldn’t be cryptic” but it’s so true. Most existing decentralized lending platforms are simply too convoluted for the everyday person to adopt. This is where Lendefi, an innovative DeFi protocol, comes in and provides a solution where it’s as simple as “borrow and invest in crypto” or “lend and earn interest on stable coins”.
As you can see UCLs are not only compelling but highly disruptive to the legacy financial system. Lending sits at the core of the banking system, hence when challenged by UCLs, the ramifications will reach far and wide. With the widespread adoption being witnessed in the blockchain space, the future seems bright for DeFi-powered Undercollateralized Loans.
LDFI is the native token of the Lendefi protocol (the “Protocol”). LDFI is a governance token which controls the interest rate model, inclusion of supported assets, reward distribution and other terms and conditions and any changes of the Protocol.
Lendefi governance via a Decentralized Autonomous Organization (“DAO”) will allow active participation of the token holders in the governance of the Protocol.
Any address holding over 1% of the tokens or voting right delegated to that address by over 1% of total supply can create proposals and the changes can be made to the Protocol via voting on the DAO.
The difference between the interest rate the borrower pays and the lender recieves, otherwise know as the spread, will be used to purchase LDFI tokens from the market for the purpose of burning and rewards.
Through a process known as burning, LDFI tokens will be burnt, hence lowering the total and circulating supply. This will result in increasing the value of LDFI tokens, therefore creating further value for the token holders.
A variety of rewards will be given in order to encourage the growth of the Protocol and creation of value for token holders.
LDFI token holders will be able to stake their Tokens and in doing so will receive a reward in the form of LDFI tokens.
Lendefi will operate a liquidity rewards program in order to provide rewards in the form of LDFI tokens to liquidity providers on a decentralized exchange where LDFI will be listed, such as Uniswap.
To encourage the liquidation process, liquidators will be provided a reward in the form of a percentage of the collateral being liquidated in the case of borrower default.
In order to foster adoption of the Protocol, lenders and borrowers will be rewarded with LDFI tokens for using the Protocol.
Initial circulating supply
Approximately 1,800,000 LDFI Tokens
(2,150,000 LDFI including Locked Liquidity Provisioning)
Initial market capitalization
Approximately 720,000 USDC
Uniswap liquidity provisioning
500,000 LDFI | 200,000 USDC (equivalent in ETH)
LDFI token is now live on the Ethereum mainnet. The token address for is 0x5479d565e549f3ecdbde4ab836d02d86e0d6a8c7. LDFI token is now live on the Binance mainnet The token address for is 0xae1119b918f971f232fed504d48604d5fef7277f. Be cautious not to purchase any other token with a smart contract different from this one (as this can be easily faked). We strongly advise to be vigilant and stay safe throughout the launch. Don’t let the excitement get the best of you.
Just be sure you have enough ETH and BNB in your wallet to cover the transaction fees.
You will have to first buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Binance (BNB)...
We will use Binance Exchange here as it is one of the largest crypto exchanges that accept fiat deposits.
Once you finished the KYC process. You will be asked to add a payment method. Here you can either choose to provide a credit/debit card or use a bank transfer, and buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Binance (BNB)...
Step by Step Guide : What is Binance | How to Create an account on Binance (Updated 2021)
You need a wallet address to Connect to Uniswap, Pancakeswap Decentralized Exchange, we use Metamask wallet
If you don't have a Metamask wallet, read this article and follow the steps
If you didn't already know, you can use Metamask on multiple chains.
Let's talk about the Binance Smart Chain "BSC".
The MetaMask extension is available on Chrome and Firefox for Desktop users, you'll also find applications on iOS and Android.
Let's focus on the Chrome version;
1️⃣ Install MetaMask: Click “Add to Chrome” to install MetaMask as a Google Chrome extension.
2️⃣ Click “Add Extension” to confirm and MetaMask will be added.
3️⃣ Click on the MetaMask logo, then create a new vault. Set your password.
It's that simple, your wallet should now be ready for action!
But wait, we aren't on BSC yet right? Correct, you now only have an Ethereum wallet.
Let's go to BSC! 🚀🚀🚀
1️⃣ Click the Metamask icon in the top right corner.
2️⃣ Select "Settings" from the dropdown menu.
3️⃣ In "Settings", scroll down to the "Networks" menu.
4️⃣ Click "Add Network" at the bottom of the menu.
5️⃣ Enter the details below and click "Save".
Mainnet Network Name: Binance Smart Chain
New RPC URL: https://bsc-dataseed.binance.org/
Block Explorer URL: https://bscscan.com
6️⃣ Congratulations you now have a Binance Smart Chain Metamask wallet! 🚀🚀🚀
7️⃣ Now its time to add your LDFI BEP-20 tokens.
Click the "Add Token" button, under "Custom Token".
Enter the Token Contract Address: 0xAe1119B918f971F232FED504D48604D5FeF7277F
Now press "Next" then "Add Tokens".
Your LDFI BEP-20 tokens will now display.
Connect Metamask wallet to Uniswap or Pancakeswap Decentralized Exchange and Buy LDFI token
ETH - 0x5479d565e549f3ecdbde4ab836d02d86e0d6a8c7 BSC - 0xae1119b918f971f232fed504d48604d5fef7277f
The top exchange for trading in LDFI token is currently Uniswap (V2), PancakeSwap and JulSwap
Apart from the exchange(s) above, there are a few popular crypto exchanges where they have decent daily trading volumes and a huge user base. This will ensure you will be able to sell your coins at any time and the fees will usually be lower. It is suggested that you also register on these exchanges since once LDFI gets listed there it will attract a large amount of trading volumes from the users there, that means you will be having some great trading opportunities!
Top exchanges for token-coin trading. Follow instructions and make unlimited money
Find more information LDFI
🔺DISCLAIMER: The Information in the post isn't financial advice, is intended FOR GENERAL INFORMATION PURPOSES ONLY. Trading Cryptocurrency is VERY risky. Make sure you understand these risks and that you are responsible for what you do with your money.
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The Lendefi protocol (the “Protocol”) allows secured lending, giving the much-needed confidence to the lenders in a highly volatile crypto market. Secure lending options will open up lending opportunities for traditional and private lenders to access higher interest rates without getting direct exposure to the crypto market fluctuations. What is LenDeFi protocol (LDFI) | What is LenDeFi protocol token | What is LDFI token
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