Are you deriving max value from your collateral while borrowing 70 cents from a 1$?
Capital underutilization is a major problem in DeFi
Capital remains idle instead of being productive
Boost your yield by utilizing your idle assets with @PinjamLabs
Let's see how
โ๏ธ ๐งต ๐๐ฝ
Problems
๐ฉ Low Lending Yields
- Yield on deposits comes from borrowed capital
- More borrowed capital -> higher interest rate for lenders
- Low borrowing -> low yield (idle liquidity)
๐ฉ Over-Collateralization
- Loans are over-collateralized
- Leads to idle funds in the pool
Pinjam Way ๐ง๐น
โฃ Provides a stable source of yield consistently to lenders even during low borrowing demand
Result: Higher Yield through borrowing + farming rewards
โฃ Utilizes the over-collateralized portion of the deposited funds
Result: No idle liquidity
How? ๐โก๏ธ
โฃ Combine pooled lending & protocol-to-protocol interactions on a single platform
โฃ Lend underutilized funds to base layer protocols (Aave) & low impermanent loss AMMs (Curve) to ensure max productivity of lenders' capital with minimal risk
Yield Flywheel
- Utilizing idle liquidity leads to higher yields
- Higher yields attract more lenders
- More lenders imply more liquidity
- More liquidity results in reduced borrowing rates
- Reduced borrowing rates attract more borrowers
- More borrowers lead to โฌ๏ธ yield
Can Pinjam be KAVA's liquidity powerhouse?
- Resolves DeFi's long-troubled liquidity fragmentation problems
- Provides higher Yield (borrowing + farming rewards)
- Reduces borrowing costs
- Leads to lower slippage
- Lends unborrowed liquidity to blue-chip protocols (reduced risk)
- Enhances capital efficiency by addressing the issue of wasted liquidity through 100% capital utilization
- Relationship complementary with other base lending protocols
- Drives holistic growth
The next wave of DeFi's growth whether centered around innovations built on existing models or entirely new solutions will have to provide long-term value
And, projects would need to build efficient flywheels that generate long-term value
Disclosure: This thread is written for Pinjam's thread giveaway
Tagging @thedefiedge @rektdiomedes @CryptoGirlNova for being great at what they do!