With the US elections over, there’s no reason we shouldn’t see this incredible momentum in Bitcoin continue. This week we’re reviewing DeFiner, a project looking to better leverage the Compound Finance platform to give users even better options for DeFi lending and saving.
Introduction
DeFiner is a platform built for users to work together to access the power, flexibility, efficiency, and convenience of decentralized financial services. DeFiner allows those embracing the new, digital economy to unlock instant value from their assets. Receive instant loans with a better interest than competitors, payback loans with collateral, and compare better options for fixed-term and fixed-rate loans all from one platform. With ongoing audits, Definer is insured by Nexus Mutual to help protect users from losses in the Defi ecosystem. DeFiner uses Binance’s open-source code to track the value of currencies and the Kyber Network to allow users the ability to swap between tokens. DeFiner has added to their ecosystem by partnering with Wyre, allowing users to take their cash and convert it into cryptocurrencies, or cash out by turning their crypto loan back into fiat currency to spend or invest as desired.
DeFiner states that on average, the Compound borrower rate is 3-5% higher than the depositing rate. With the interest rate earned by depositors equal to the borrowing interest rate, multiplied by the utilization rate. The utilization rate ranges from 40-75%. Or, if you reverse these numbers (60% – 25%), showing there is usually 25-60% capital earning nothing. This is the major reason that the spread between the borrowing rate and lending rate is so high on Compound. The management of a DeFiner Savings Account claims to have resolved this issue. As the Taurus DeFi Savings Account deposits excessive capital to a money market like Compound or Maker to improve the capital utilization rate to more than 85%. For example, if there is a total of one million USDC in the DeFiner savings account, and 50% has been lent out to borrowers. There’s now half a million (500,000) USDC in excess capital. The DeFiner savings pool contract will automatically deposit 0.35 million (350,000) USDC to the money market (at Compound Finance or Maker), which will then earn interest while the remaining 0.15 million (150,000) USDC will be held in reserve. This reserve ratio (now 15%) is adjustable and can be as low as 5% or in this case (50,000) USDC. In the same scenario at Compound, 0.35 million (350,000) USDC will sit in their savings pool and earn nothing. This will be the big selling point for borrowers and lenders looking to use the Definer platform instead of Compound alone. To better capitalize on the extra interest their capital could be earning at DeFiner.
Another problem borrowers have is locked collateral. When they want to pay back the loan, they have to secure the funds to pay off the loan balance. But, their locked collateral cannot be used for this purpose. Instead, DeFiner gives the option for borrowers to pay back the loan with their locked collateral. To do so, the borrower pays a 2% fee to a 3rd party liquidator, which pays back the outstanding principal and interest on the loan. In exchange, the liquidator gets the equal amount of collateral with a 2% discounted price. Additionally, with no fixed-term or fixed-rate loans offered in the…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
