Connect with us

cryptocurrency

Algorand’s Defi Solutions – How Crypto Lending Can Be Built On Algorand Blockchain

Published

on

Algorand's Defi Solutions - How Crypto Lending Can Be Built On Algorand Blockchain

If you’ve heard of crypto lending or DeFi (Decentralized Finance), you probably already know that it is the future of global finance. You also most likely know that Algorand is a programmable blockchain, that means if you are a programmer who understands coding on Python, Javascript, Java or Go programming language, you can build decentralized application solutions on the Algorand Blockchain.

Your first steps (Steps actually) in the journey to building solutions on the Algorand Blockchain is to attend Algorand’s Webinar on How to Build Blockchain solutions, holding on the 17th of November 2020. Sign up here https://info.algorand.com/build and also visit https://developer.algorand.org/ to get started.

Algorand’s Blockchain structure allows for DeFi decentralised solutions to be built and run effectively while ensuring decentralisation, security and scalability, this is a plus for enterprise solutions which require speed in transactions and affordable fees.

One of the most popular DeFi solutions is “Crypto Lending”, and Algorand Blockchain is already partnered up with a digital assets financial service provider – Delchain who provides these kinds of solutions.

Before we talk about this partnership and what it means for Algo holders and DeFi investors, let’s take a brief look at Crypto Lending and what it means.

What is Crypto Lending?

Crypto lending is simply borrowing and earning through and with Crypto Currency. If you have ever applied for a loan in your bank then you’d understand how loans work.

In the banking world, liquidity for finance (basically in the country’s currency) is provided by the people who create and fund their savings account, fixed deposits, current account and more. The bank takes that liquidity, trades with it by providing loans to business people who need it, they earn returns on those loans, which are collateralized by the way, and then pay an interest to those who provided liquidity namely account holders of the bank.

Now this would be a really good finance system if there weren’t already some issues with the banking system;

  1. Centralized Currency: The currency isn’t decentralized and secure, hence if liquidity providers, account holders refuse to provide liquidity, the government or Central Bank can decide to print that currency, and inject it into the system, thus providing liquidity for themselves and reducing the value of the currency in the hands of the people “Hodling” (see why people hold crypto?)
  1. Slow Application Process: Another reason is the process for applying for Financial Services like loans are cumbersome, bureaucratic and sometimes biased.
  1. High-Interest Rates: Imagine having to pay 30% interest rate on a loan for a business.
  1. Low ROI & Inflation: It’s no news that banks ROI rates are quite small and also subject to inflation.

Crypto Lending offers finance services much like the banks do, but without the limitations of Centralized Finance.

  1. Decentralization: This ensures the fairness of the lending system and creates a trustless automated process for users to access financial services like borrowing and earning interests.
  1. Flexibility: Imagine you held some $Algos, but you needed cash for your business, but you don’t want to sell your $Algo assets because you know it’d increase in value (Moon). With Crypto Lending, you can still hold those $Algos in your balance and borrow a % of that balance in a stable coin or cash against it.
  1. Staking: Crypto Lending platforms allow for holders of a currency to receive returns or passive income for holding those currencies, currently; the APY for staking ALGO’s on Delchain is 5% – 7%
  1. Processing Speed: Accessing loans on Crypto Lending platforms are quicker and easier to process than with our traditional banking system.

There are lots more advantages to this but I hope you get what Crypto Lending is now?

Crypto Lending solutions and other DeFi solutions can be built on the Algorand blockchain and here’s an example one who has already started by partnering up – DELCHAIN.

Algorand’s Stateful TEAL is an assembly-like stack machine language that provides programmers and developers the expressive power to implement common Crypto Lending transactions such as securitized loans, post and sale transactions and many others.

This makes Algorand  the preferred blockchain to build solutions that will serve more users without being slowed down, but stay secure and stay truly decentralized.

The Importance Of Delchain’s Partnership With Algorand

First, $Algo holders can deposit, stake and earn returns on their $Algos. “Delchain recently introduced staking to its services, giving their clients an opportunity to generate passive income while their assets remain in a secure and insured cold storage”.

Delchain Cryptocurrencies

Also, more partnerships with Crypto Lending solutions and more Finance solutions Built on the Algorand blockchain will begin to emerge.

So…..Are you holding $Algos?

Algorand and Delchain on Crypto Lending

To learn more about the Algorand Blockchain please click this links and connect on any of the platforms below;

Website: https://www.algorand.com/

Twitter: https://twitter.com/Algorand

Telegram: https://t.me/algorand

My name is Karla Obakpolor, and I am an Algorand ambassador, you can reach me on twitter;

Continue Reading
Advertisement hag-car
Click to comment

Leave a Reply

Your email address will not be published.