PARIBUS: A CROSS-CHAIN LENDING AND BORROWING PROTOCOL
Because of its rapid growth, DeFi has been referred to as the financial transformation. DeFi currently has the most success and promise in the loan and borrowing sector. As a consequence, Paribus incorporates this methodical innovation into the ecosystem design. This new Paribus model will be built on non-fungible assets, liquidity holdings, artificial tokens, and other yielding assets. By utilizing the worth of unusual assets like synthetics and NFTs, Paribus seeks to increase the range of decentralized borrowing and lending. Cardano can link to existing blockchains, allowing Paribus to increase liquidity across a number of blockchains and their various virtual assets. Paribus does that by providing services to both lenders and debtors.
Currently, the most noteworthy and promising of the key areas where DEFI succeeds are lending and borrowing. Consumers can now get quick loans with cheap interest rates. Decentralized financing crosses regional borders and creates new opportunities for microlending.
For a variety of conventional and unconventional digital assets, such as liquidity positions, synthetics, virtual land, and NFTs, the Paribus protocol seeks to create cross-chain liquidity. The long-term objective is to unlock latent on-chain value for the overall cryptocurrency sector.
With Paribus, users can combine a cutting-edge strategy to non-fungible tokens (NFTs) with decentralized finance to tokenize any verifiable off-chain asset (DeFi). Users can benefit from these NFTs and repurpose underutilized assets by utilizing the borrowing and lending procedures of the Paribus.
There are many different types of users and jobs on the Paribus Protocol, but we’ll focus on just two. lenders and borrowers
1. LENDING
Instead of having investors’ virtual assets sit around doing nothing, Paribus offers them the chance to make passive income from them if they don’t want to sell them permanently.
In the Paribus environment, lenders act as liquidity providers and are paid interest. Because Paribus calculates Deposit APR based on factors like utilization rate, lenders can use the Deposit APR for any specific asset to predict their revenue.
When the value of the loan’s pledged collateral drops below a predetermined threshold or when the cost of the loaned commodity rises above a predetermined value threshold, the platform goes into liquidation.
BORROWING
Due to the fact that Paribus acts as a platform for collateralized loans, each borrower is required to deposit an asset for use as collateral.
Users of the Paribus protocol have access to non-fungible token collateral-based loans since they can use any NFT asset they own as collateral to obtain loans. Customers can then borrow money against the underlying NFT when the asset’s value rises. Paribus also recommends a set of smart contracts that support virtual lands as security for borrowing money.
When requesting a loan, owners of LP tokens may use their investment as security. All loans on the Paribus platform are fully collateralized. As a result, the platform is safe, independent, and scalable.
For each borrowing activity, the Paribus protocol assesses a borrowing cost. As at the time of writing, this was 0.2%. (However, this rate may change as a result of the governance voting process.) The cost will be displayed on the user’s dashboard along with the total amount borrowed. The protocol reserves will be increased as soon as these payments are received. This fee acts as a “safeguard” to stop short-term borrowers from being treated unfairly.
Please take note that payment schedules for conventional or exotic assets are not included in paribus loans. The borrower selects the timing, frequency, and amount of repayment. However, customers are encouraged to pay attention to the liquidation zone and interest rates.
STAKING
Paribus provides users with access to numerous market-specific staking pools for LP tokens. Native staking for the PBX coin is made available on Paribus, providing a dynamic APY and substantial incentives. Liquidity providers from other third-party platforms can also profit by staking their LP tokens.
Therefore, users may stake their NFTs in comparable NFT pools using Paribus. Users start to receive a yield on their investments as a result, creating a passive income stream.
By staking their tokens in a tiered system, all PBX token holders have the opportunity to earn passive income. With higher stakes come higher levels and percentages. A portion of platform fees are paid to holders of PBX tokens as compensation.
Users of the Paribus network can leverage their holdings as liquidity providers (LPs) by borrowing money against their positions in LP tokens. Paribus users can borrow against the liquidity positions of numerous automated market makers thanks to full collateralization (AMMs).
As a result, Paribus offers DeFi investors a platform for extending the reach of their digital assets globally and touts itself as the first decentralized, permissionless platform to enable borrowing and lending against a variety of assets.
CONCLUSION
To give people access to a single platform where they can simply and freely participate in this financial revolution is the mission of Paribus. Exotics are presently making slow but steady progress, while dexes and lending platforms are at the forefront. Paribus is advancing iteratively in response to opportunities that show themselves and in anticipation of demand in order to build on what has already been done. For holders of non-fungible tokens, liquidity positions, and synthetic assets to profit properly from their worth, DeFi apps are necessary.
Through the following links, you can learn more about Paribus and stay up to date with all of their most current news and developments: