The DeFi lending market is growing by the day, with millions of dollars worth of loans being funded in hopes of securing higher profit margins. While collateralizing cryptocurrencies does wonders since it allows users to retain value obtained through price growth, doing so was once impossible for coins already deposited in liquidity pools.
Freeliquid was therefore launched to change the DeFi lending game, by collateralizing liquidity pool ownership tokens in exchange for funding loans equivalent to 90% of the LP share. With no interest rates, no risk for liquidation, and no stability fees at this time, Freeliquid is leading the LP lending market. When using Freeliquid’s funding service, DeFi enthusiasts can significantly increase their APYs by depositing additional liquidity, and using the newly-minted LPs to fund additional loans. As the process can be repeated several times over, magical double-digit APYs are seamlessly obtained. Freeliquid currently collateralizes stablecoin LPs originating from Uniswap and Curve’s 3pool.
All loans are funded in USDFL, a stablecoin whose value is algorithmically soft-pegged to the USD. Freeliquid has yet another token, FL, which grants holders governance rights over any decisions the protocol takes. User incentives are a critical part of the Freeliquid infrastructure, which is why the protocol is actively getting involved with high-level partnerships that always benefit the end users.
Such an example is the recent integration with Swop.Fi and the Waves Exchange.
Freeliquid’s FL governance token was distributed via a fair model, allowing users to obtain it in exchange for providing liquidity on selected pairs.
With this in mind, the Swop.Fi integration provides additional incentives by creating a FL/USDN pool on the well-known automated market maker. Liquidity providers looking to get involved receive a fair distribution of transaction fees obtained via swaps, alongside $SWOP-based rewards. The Swop.Fi community is voting on the amount of $SWOP being rewarded to FL/USDN pool participants on the 29th of March, with rewards expected to kick off on the 5th of April. $SWOP represents the AMM’s governance token, which is often distributed as rewards to pool participants.
It’s now time to discuss the Waves Exchange integration. Waves represents a centralized exchange that retains most of the benefits associated with automated market makers. User funds never leave the wallet, as they’re all stored in a non-custodial manner. Waves also operates its very own blockchain network, which means that swaps are lightning quick and available at a fraction of the costs to those expected from the Ethereum blockchain. Waves now supports a FL/USDFL trading pair, with liquidity being added daily.
These two integrations are expected to lead to multiple user benefits, as inter-coin swaps are now available at lower costs, whereas LPs are further rewarded with $SWOP tokens.
With the official launch of these new developments, Freeliquid has officially completed its 2021 Q1 roadmap, with many more releases being in the works for the 2nd quarter of the year. One example is the upcoming expansion to the Binance Smart Chain, providing even cheaper transactions whilst opening up the first BSC-based DeFi lending platform for collateralized LPs.