Concord, a sharding protocol with a trustless Ethereum bridge, has introduced that OIN Finance, a decentralized stablecoin issuance & buying and selling platform, shall be deploying on Concord, to create a ONE-backed or ONE-denominated stablecoin.
A ONE-backed stablecoin is a vital achievement for Concord, as this helps develop its DeFi ecosystem; and helps set up an vital DeFi primitive that can be utilized in all different DeFi protocols.
The Concord DeFi Lego Stack
One intention of Decentralized Finance, or DeFi, is to imitate to a point the centralized finance world. In that world, the span of monetary providers embrace:
- Borrowing/Lending (mounted APR, variable curiosity APR)
- Financial savings accounts with APR
- Insurance coverage
- Spinoff markets
- Artificial belongings
These are simply some of the monetary providers that one can count on from any monetary system. Moreover, it may get far more refined and sophisticated.
The fundamentals of any DeFi system are usually referred to as “DeFi Primitives” — these are sort of like the bottom layer of a Lego set, upon which you’ll construct the construction. A key Defi primitive is the stablecoin. And now Concord could have one collateralized or “backed by” the ONE token.
Stablecoins that many have heard of are USDT, USDC, DAI, and others. Concord is actively working with established stablecoin issuers to natively assist Concord.
A ONE-backed stablecoin is exclusive as a result of, in contrast to different stablecoins that are backed by the VIX (Benchmark Protocol MARK), the price of a unit of manufacturing for PoW miners (Meter MTR), and others.
With OIN Finance, the stablecoin on Concord shall be collateralized by ONE.
The product to be constructed on Concord is OINDAO, which is a decentralized stablecoin issuance platform that was beforehand launched on Ethereum.
Whereas MakerDao permits solely mainstream belongings for use as collateral to challenge DAI, OINDAO permits initiatives to challenge model labeled stablecoins which are collateralized by their very own tokens. With deliberate off-ramps and use circumstances reminiscent of swapping for different mainstream stablecoins, including leverage, hedging, lending, and a plethora of ecosystem-specific utilities, the probabilities are countless with OINDAO.
MakerDAO, and different DeFi platforms like Compound, additionally act as gatekeepers in electing which initiatives are chosen to turn into a part of their swimming pools, thereby establishing a big barrier of entry for almost all of initiatives. OIN is ready to resolve this downside and construct a higher DeFi ecosystem, centered upon inclusion and permissionless engagement.
OIN’s imaginative and prescient is to offer DeFi functionalities to all crypto initiatives, giant and small. Customers will be capable to unlock the liquidity of their favourite belongings whereas ‘HODLing’ them. They will even be capable to make the most of the stablecoins for ecosystem-specific utilities; as leverage to purchase extra tokens, and even to swap for different stablecoins reminiscent of USDC and DAI.
What Does This Imply for the Concord Group?
- Hedge towards volatility – A stablecoin gives a superb methodology to park cash throughout buying and selling or to make use of as a base forex. A ONE-backed stablecoin acts as the bottom forex within the ONE ecosystem, serving to the ONE group to hedge towards volatility.
- Encourage mainstream adoption – The ONE-backed stablecoin will encourage the mainstream adoption of ONE ecosystem initiatives. Most blockchain initiatives have the imaginative and prescient to vary one thing in the actual world. ONE-backed stablecoins create an extra abstraction layer for mainstream customers, who will be capable to work together with ONE-backed stablecoins in an analogous method to fiat — with out having to fret in regards to the underlying volatility of the crypto asset.
- Driving ONE shortage – With extra ecosystem-specific utilities behind a ONE-backed stablecoin, extra ONE-backed stablecoins may be minted. The rising quantity of locked liquidity reduces the circulating provide of ONE, making a closed worth loop for ONE’s token financial system.
- Unlocking and streamlining worth on ONE protocol – OINDAO’s sensible contract helps multi-coin farming for as much as 20 totally different tokens. This assist will create synergy between tokens on or bridged to ONE protocol. Customers who stake ONE can farm 20 totally different venture tokens within the ONE ecosystem.
“OINDAO and Concord are aligned on one other vital level: our imaginative and prescient of the longer term is a world of many thriving communities. In that world, every chain could have its personal ecosystem and strengths and weaknesses. Concord desires to be a significant actor and add worth to customers throughout all chains. However the best way to get there’s to a series that excels in interoperability. Beginning with Ethereum, and step by step increasing to different fashionable ecosystems, OIN is on observe to construct a higher DeFi ecosystem and turn into a one-stop-shop for cross-chain stablecoin issuance, buying and selling, and implementation.”
– The Harmony Team