Flare Blockchain’s DeFi Ecosystem Is Growing
Flare is delivering bespoke loan networks to Songbird, Flare’s canary network, in collaboration with Ola Finance. Songbird and Flare-based DeFi projects can use Ola’s protocol to set up a lending network.
All F-Asset tokens, such as XRP, DOGE, ALGO, and LTC, will be accepted via the loan networks, bringing non-turing tokens into the DeFi ecosystem, reports hackernoon.comhackernoon.com.
Flare is a network that integrates Turing incomplete blockchains with the Ethereum Virtual Machine (EVM), enabling for the inclusion of an asset in a smart contract-enabled ecosystem.
Flare is the first Layer-1 blockchain to provide trustless and secure inter-ecosystem interoperability without requiring any changes to the integrated chain. Because of the combination of next-generation consensus, the State Connector, and the Flare Time Series Oracle, Flare can interface with as many blockchains as feasible, resulting in a powerful cross-chain protocol that is truly decentralised, safe, and scalable. Flare is a rapid, low-cost, and low-carbon future that is united and decentralised.
Ola Finance is a technology platform that offers lending-as-a-service to its partners. While the protocol is used to construct the lending network, once it is implemented, the protocol’s partners become the network’s proprietors. Ola has developed loan networks worth $48 million for partners like as SpiritSwap on Fantom, ApeSwap on Binance Smart Chain, and Fuse Network. It provides these communities with borrowing/lending services as well as all of the benefits of having their own Lending Network without the need to invest in one.
Crypto-based Lending Protocols: An Overview
The value of the virtual currency business has risen to $3 trillion. During the previous decade, there have been important developments in the bitcoin area. One of the most recent inventions is the field of decentralised finance (DeFi).
DeFi is one of the fastest-growing areas in the bitcoin world. It offers bitcoin investors and other market players a wide range of services. DeFi lending is enabled by lending platforms or protocols. These services offer secure cryptocurrency loans by allowing users to invest their coins in DeFi lending networks for lending.
A borrower can use the DeFi platform to obtain a loan, which allows the lender to receive interest after the loan is returned. From start to finish, the loan method is carried without the involvement of intermediaries.
A smart contract is used by a coin holder to transfer the tokens they want to lend into a pool. When coins are sent to a smart contract, they become available for other users to borrow. The smart contract then generates tokens, which are automatically delivered to the lender. The tokens, in addition to the underlying assets submitted to the smart contract, may be redeemed at a later date.
Almost every loan made with native tokens has a collateral component. Users who wish to borrow money will have to put up a security deposit. Unlike traditional banking, the DeFi space offers a guarantee in the form of cryptocurrencies that are worth more than the loan.
On paper, this strategy may appear illogical because the borrower might earn the funds by selling their assets first. DeFi borrowing, on the other hand, has a number of advantages.