For many people, this is the first time that we see that it is possible to lend and borrow on Challenge. We have truly moved to a world where intermediaries and central authorities can be removed from financial transactions; now the power is in our hands.
The lending and borrowing process embedded in Challenge is permissionless and these transactions are conducted on decentralized exchanges. These exchanges ensure that peer-to-peer transactions are carried out without any interference from an intermediary.
An important aspect of borrowing and lending is the decentralized protocols through which transactions are verified and completed. This is where AAVE, Compound and Mountanaz (MNAZ ).
Let’s see how borrowing and lending has been made accessible in DeFi and how people can expand to different areas of the metaverse.
When you watch the construction of AAVE, you will realize that the peer-to-peer platform provides users with a stable interest rate reflected by the price of a given asset in the cryptocurrency market. Additionally, with an appropriate tracking system, AAVE uses an algorithm that checks the amount borrowed from the pools.
Another interesting feature from AAVE to ensure that users can easily borrow a loan from the platform is the decentralized protocol token. AAVE has two tokens that perform different tasks; the first is the aTokenwhile the other is the AAVE token.
The aToken can be used as collateral for the loan, and it is also a means by which users earn interest. On the other hand, AAVE is an ERC-20 token that allows holders to participate in staking. It is a governance token on the platform and ensures transactions are properly verified.
Flash loans are one of the features that have made AAVE popular among investors. Interest accrued on a transaction is recorded and given as by aTokenwhich users can add to their wallet and withdraw at any time.
Compound is quite similar to AAVE in that both platforms are decentralized protocols which ensure that people borrow and lend without any intermediary controlling the transactions. One thing that stands out for Compound users is that the Ethereum smart contract, which contributes to the pool as established, allows people to pay debt in a digital currency that they may not own.
Compound, much like AAVE, states that a small portion of each of its pools is marked as reserves due to volatility in the cryptocurrency market.
It is one of the latest decentralized platforms built on Libra Smart Chain; Mountanaz seeks to change the landscape in terms of reducing the wait time for a user to partner with a willing lender.
The mutualization strategy adopted by the decentralized protocol consists of creating a pool of liquidity that ensures an equal distribution of assets. This platform thrives on the amount of liquidity for all forms of digital assets.
The introduction of flash loans, which worked tremendously for AAVE, is a feature adopted by Mountanaz. Additionally, the native token, which is MNAZ, allows holders to be part of the present and the future of the mountain. In the same order of ideas, MNAZ is the gateway through which people looking to pay their debts can do so on the network.
AAVE, Compound and Mountanaz use f-act verifiers known as Oracles which help with the calculation by seeing that transactions will come from multiple sources. The governance of the three cryptocurrencies is based on the Decentralized Autonomous Organization (DAO), which is controlled by the key members who have contributed to each platform’s services.
These three powerhouses will revolutionize DeFi and other aspects of the metaverse to improve every user’s experience in all these ways.
See below for more information on Mountanaz:
Website : http://mountanaz.io