While the decentralized finance market is rapidly attracting billions in capital inflows, DeFi users are further expanding their available capital through crypto-collateralized loans. This trend isn’t linked to traditional lending needs, but rather to a growing demand for liquidity to access emerging opportunities in the crypto space.
Everyday, crypto gems see massive value increases, with staking initiatives and liquidity pools yielding great profits. Crypto loans allow you to keep your current revenue streams and expand to new ones without increasing your fiat deposits.
The Case for Liquidity Providers
A significant percentage of DeFi users are liquidity providers on automated market makers (AMM) platforms. In exchange for providing liquidity in a specific trading pair, LPs receive share tokens and great APYs, unlike those provided by the traditional financial system. As LPs already have their coins locked in lucrative revenue streams, tapping into new opportunities would entail pulling out their liquidity, causing a drop in the current cash flow.
Freeliquid was created to solve this problem. As a DeFi lending protocol, Freeliquid collateralizes LP tokens and gives out loans amounting to 90% of the respective LP shares. All loans are credited in USDFL, the platform’s native stablecoin which is soft-pegged to the USD value.
Upon receiving USDFL, Freeliquid enthusiasts can provide additional liquidity to unlock more LPs which can be further collateralized. Increasing your liquidity pool yields becomes child’s play, yet there’s also room to get involved with staking, farming, and trading.
Traditionally on Uniswap, Freeliquid Has Now Expanded to Curve Finance
After a successful community vote by FL governance token holders, Curve’s 3pool liquidity providers can now collateralize their LP tokens to quickly access USDFL loans. The platform supports DAI, USDT, and USDC LP pairs, so there’s no risk of liquidation due to the stable nature of these currencies.
Freeliquid’s loans have flexible repayment times, and do not incur interest rates at this moment. The only cost users ought to pay is the gas fee required to interact with the lending contracts.
Freeliquid is also available on Uniswap, and is working on expanding to Waves DEX.
Gas Fees on Ethereum too High? Announcing the Expansion to Binance Smart Chain
Ethereum remains DeFi’s beating heart, but the huge gas fees incurred for all transactions make it a less suitable choice for smaller players. Paying $100 in network fees for a loan won’t do it for most people, so Freeliquid is expanding to the Binance Smart Chain.
After finalizing the expansion, Freeliquid will operate independently on both blockchain networks. The dev team is currently working on a cross-chain bridge, allowing users to seamlessly swap their USDFL stablecoin and FL governance tokens between the two token standards.
There’s huge liquidity being provided on BSC, with AMMs like PancakeSwap holding over $4 billion in total-locked value. The supported LP pairs will be announced in due time!
Freeliquid is planning dozens of additional developments, further establishing it as the market’s best DeFi lending platform for collateralizing liquidity pool holdings.
Looking to get involved? Check out Freeliquid’s website, Medium, Twitter, and Telegram communities.