RISK BALANCER, PWRD & VAULT AS IT RELATES TO RISK TRANCHING ON GRO PROTOCOL
As we all know, Blockchain and cryptocurrencies are becoming subjects of increased interest daily. Inasmuch as they pose to be a one way ticket to success, lots of people still do not know how to thrive in the cryptosphere and its even worse for crypto-starters.
Most blockchain enthusiasts would encourage HODLing (a crypto term, a misspelt form of hold) which means Hold On for Dear Life with an assurance that the prices would move in a favourable and anticipated direction.
Quite easy it is to say, however price volatility is one of the prominent risks crypto enthusiasts and investors face when dealing with cryptocurrencies. What then can one do?
Glady, I have a solution for you. With this, you can invest and still find sound sleep afterwards. Welcome to Gro Protocol. Let us take a tour!
SUMMARY OF GRO
Gro Protocol is a DeFi yield optimizer that breaks down investment risk and offers leverage and protected savings through its tranching mechanism. It offers different products to match your personal yield and risk profile. Its products are Risk Balancer, PWRD and Vault. These products are best suited for any category of investor, low-risk investors and higher-risk investors.
Risk Balancer
Risk balancer is the program that autonomously balances the available assets on Gro Protocol to enable tranching of smart contracts and stablecoins risks. It is also the underlying product of the Gro Protocol that powers the other two products PWRD and Vault.
PWRD
PWRD is low-risk savings product on Gro Protocol. It is a tokenized stablecoin designed to provide Gro Protocol users with low-risk DeFi yield opportunities. Its value is endorsed by three top stablecoins in the market, DAI, USDC and USDT. Conversely, it is protected from issues or losses associated with these coins. Therefore, PWRD is the perfect investment for a low-risk investor.
Vault
Gro Vault is one of the core products on the Gro Protocol. It is the highest yielding stablecoin in the market and also a sister product to PWRD. One of its uses is to absorb markets failures associated with investments on PWRD. For this to occur, PWRD users must buy deposit protection from Vault holders via a profit-sharing mechanism. Vault has a higher risk appetite as such higher rewards. Well, only the daring and high-risk takers care to tread here.
How Gro Utilizes PWRD & Vault
DeFi investment is still an area of wide uncertainty and risk in the cryptosphere, that many dare not to tread. Due to these uncertainties, Gro uses a range of innovative products on its protocol to make safer crypto investments and yields.
Gro in this light, facilitates DeFi markets, breakdown risks and optimizes yield via its core product, Risk Balancer which in turn is an underlying module for PWRD and Vault.
Risk Balancer shares yield between PWRD and Vault through its risk- and yield-tranching mechanism. As Gro Risk Balancer spreads risk across stablecoins, this helps to protect PWRD if one of DAI, USDC, or USDT fails or gets censored. It then offers Deposit Protection, as the risk tranching mechanism means that any loss of capital from stablecoins or yield strategies is first absorbed by the Vault, letting PWRD generate yield more safely.
In Conclusion,
DeFi is still a very new space, and while that’s exciting, it comes with risk. Gro Protocol’s software helps you access this world, but make sure you do your own research and only supply assets you can afford to lose.