Novel Fix Interest Lending protocol/Vires relaunch(rebranding) with the same $Vires token.
17 Nov 2023, 12:22
Novel Fix Interest Lending protocol/Vires relaunch(rebranding) with the same $Vires token.
This DeFi lending protocol operates on a unique model distinct from the conventional approach, where the interest rate is typically tied to the utilization of funds supplied by lenders. In this protocol:
1. Fixed Borrower Interest: Borrowers are required to pay a fixed interest rate on a weekly basis. Regardless of how they use the borrowed funds or their utilization, the interest amount remains constant.
2. Collateral-Based Borrowing: Borrowers can access funds up to a limit determined by multiplying the total liquidity provided by lenders by a predetermined fixed collateral ratio, typically ranging from 0.1 to 0.5. This ensures that borrowers maintain collateral in proportion to their borrowing, reducing the risk for lenders.
3. Collateral Liquidation Mechanism: If a borrower fails to make their weekly interest payment, a portion of their collateral is automatically liquidated to cover the outstanding interest amount. This not only safeguards the interests of lenders but also serves as a mechanism to maintain the health of the borrower's account. Prolonged failure to meet interest payments could lead to the borrower's account being liquidated entirely.
4. Fixed Interest Rate: Unlike traditional lending models where interest rates fluctuate with utilization and market conditions, the interest rate charged to borrowers remains constant. This predictability can be advantageous for borrowers in managing their financial commitments.
5. Capped Borrowing Limit: To ensure the stability and liveliness of the system, only a specific percentage of the total available funds can be borrowed at any given time. This limitation prevents excessive borrowing that could potentially strain the system's liquidity and operations.
In summary, this DeFi lending protocol offers a structured and predictable lending environment where borrowers pay a fixed interest rate, collateral plays a pivotal role in determining borrowing limits, and there are safeguards in place to maintain the system's health and stability.
To be launched as a DAO on Power protocol.