LENDING AND BORROWING WITH DEFI — THE SHIFT FROM FIAT TO BLOCKCHAIN
With a history of over 4000 years, the concept of “Lending and Borrowing” has been and still is a core fundamental in the financial system. The basic idea of lending and borrowing in both the realms of the traditional as well as the crypto sphere entails the act of exchanging goods in the form of Fiat or digital currencies.
Traditionally, lending and borrowing are facilitated by the involvement of a third-person intermediary, but in the DeFi industry, transactions are governed by one’s own. Building on the advantages of blockchain technology, DeFi has revolutionized an era of lending and borrowing. It has simplified fund transfers, therefore, creating transparency, a key feature missing in traditional banking.
Another feature that differentiates from the traditional world is decentralized lending pools, where all lenders are provided with a market to deposit their assets into a smart contract.
On the contrary, the borrowers are permitted to take loans from the pools where there is more demand for borrowing and low supply, resulting in higher interest rates. In the form of interest, the profits earned from the loans are equally divided amongst the investors involved in the Lending Pool.
Defi is Non-Custodial, Trustless; it involves lending and borrowing crypto assets directly with the use of a smart contract while retaining the custody of the whole collateral during the entire loan life cycle.
The evolution in the lending and borrowing space can be witnessed by the incorporation of NFTs. An NFT (non-fungible token) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs make digital artworks unique and impossible to replicate therefore making them profitable.
The lending-borrowing market has been stuck in a whirlpool of challenges for years. It is not foreign that the current credit system is fundamentally flawed, but that’s where TribeOne steps in by introducing lending and borrowing in innovative ways.
Providing the user with a seamless experience in the field of crypto by introducing innovative products. Allowing users to get loans against their NFTs as collateral or get loans to purchase NFTs.
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