Introduction to lending
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Table of ContentsIntroduction to lendingBenefits of DeFi LendingLending with TLOS: OmniLendRiskMore resources:
Introduction to lending
Defi lending allows lenders to earn interest for lending their crypto assets providing a chance for long-term investors to earn high-interest rates. Users borrow and lend cryptocurrencies for a fee or interest through a DeFi lending DApp or a cryptocurrency exchange. When you return your loan plus a fee, your capital is unlocked.
Defi lending offers a censorship-free environment, meaning there is no preferential treatment while ensuring immutability. Defi lending platforms offer margin trading options and aim to offer crypto loans in a trustless manner, without the use of intermediaries and allow users to enlist their crypto coins on the platform for lending purposes.
How Lending Works: Benefits and Risks analysed
Defi lending benefits both lenders and borrowers:
- The borrower initiates the process by depositing crypto assets as collateral
- The site disburses loans through self-regulating smart contracts
- The borrowers pay a different interest rate for borrowing cryptocurrencies
- The interest the borrowers pay goes to the lenders
Benefits of DeFi Lending
- Better borrowing speed / loan origination speed
- The lack of third-party involvement streamlines processes and fast tracks the loan approval process. Backed by cloud-based services, analytics for fraud identification, detection and machine learning calculates for optimum loan terms and risk factors.
- No intermediaries
- Smart contracts are autonomous protocols that activate without any oversight.
- Permissionless & Transparent
- DeFi platforms, with \no geographic limitation or credit history requirement, are transparent and open ecosystems where anyone with a crypto wallet can join by meeting the platform’s requirements.
- Greater consistency in lending decisions
- Rules describing credit policies guarantee consistency in lending decisions. Variations in evaluating applicant attributes and structuring deals by underwriters are eliminated.
- Immutability & self-custody
- Blockchain’s decentralized architecture ensures tamper-proof data coordination and increases security and auditability to keep strong custody of their assets and control their data
Lending with TLOS: OmniLend
The introduction of non-custodial, leveraged trading, delivers another valuable application to the lightning-fast Telos EVM, and sets in place another key pillar for the OmniDex DeFi ecosystem. This latest step provides investors access to another core tool for long term investments
Introducing OmniLend on the OmniDex platform
OmniDex introduces new and comprehensive crypto trading opportunities by uniting lenders and borrowers through its OmniLend platform on the Telos EVM. OmniLend provides a decentralised, non-custodial solution to connect users who wish to lend with those who want to borrow. Depositors can earn a passive income by providing liquidity to the market, while borrowers are able to secure loans, in an overcollateralized manner, against whitelisted assets that they hold. User funds are held in decentralised smart contracts that have been formally verified and audited by third party auditors.
By depositing existing assets as collateral, investors can rapidly access additional funds, helping to leverage their overall investment returns. This facility also works for single-sided investments, helping to quickly accelerate portfolio growth. It is built on the proven, open source Aave protocol, providing confidence to both lenders and borrowers. The protocol adopts a fully transparent risk-management framework that is based on the recommendations of specialist quantitative modelling experts such as using the lightning-fast Telos EVM (tEVM) to facilitate new investment strategies.
Read more about OmniLend here.
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