New Bloqboard Lending Aggregator Report Analyzes Compound, Dharma, dYdX and Maker Protocols
Bloqboard is a decentralized lending aggregator platform which recently released a complete report on digital asset loans and borrows routed through open decentralized lending protocols Compound, Dharma, dYdX, and MakerDAO.
These 4 major decentralized protocols were used to process $251 million worth of ETH, DAI, REP, ZRX and BAT loans and borrows routed via open protocols and settled on public blockchains.
The decentralized finance or open finance is the name for financial transactions made on decentralized blockchain networks. The reason for the ever-increasing market for open finances can be found in its core principle. The decentralized form of finances ensures minimum risk as it works on the core value of transparency, accessibility and financial inclusion.
The open-finances are as secure as technology can get us through and it makes use of cryptography verification to ensure the security of highest level.
The Decentralized Lending Protocol and Its Benefits
The decentralized lending protocols trump over its traditional predecessors with the help of open technology standards designed specifically for borrowing and lending. These protocols provide near instantaneous transactions at minimal cost.
It allows for the standardization and interoperability to ensure smooth functioning among the participants in the decentralized finance ecosystem.
The four major protocols Compound, Dharma, dYdX, and MakerDAO make way for seamless matching of borrowers with lenders, hypothecation, collateral custody and management, transaction settlement and risk management.
Digital Asset Borrowers and Lenders
The major digital asset borrowers include trading desks, cryptocurrency hedge funds and active traders who want to make the most of the volatile decentralized market of cryptocurrency. The borrowers use the capital into margin trading, short selling and whatever methods to make the most out of the borrowed digital asset.
The lenders might include capital investors, asset managers, family offices and high-net-worth individuals who are willing to bet their asset on the volatile market and some dividends out of it.
Loan Origination and Settlement
The loan origination of digital assets on the public blockchain started to gain momentum in December 2017 with the introduction of stable coin DAI, which was pegged against the US dollar and was adjusted to carry the value equal to one US dollar at all times.
Before the introduction DAI, all lending of the digital assets were routed through the Ethereum blockchain.
Right from the end of 2017 and throughout 2018 the lending of the digital asset through open finances had been quite active. The major reason for the momentum could be attributed to the sky-rocketing prices of digital assets in December 2017.
Some of the Major Highlights From The Bloqboard Report
- The four major lending protocols (Compound, Dharma, dYdX, and Maker) cumulatively processed (sum of borrows and loans) over $251 million in originations, with Maker driving 97% of active loans outstanding (~$71.8 million outstanding).
- Avg APRs were widely dispersed across the protocols given borrowed asset, with the lowest APR set for DAI through MakerDAO (ranged from .5% – 2.5% in 2018) and the second lowest APR for WETH at ~6% through Compound.
- Collateral ratios varied greatly as well, with Compound north of 700%, Maker at 380%, dYdX ~160%, and Dharma holding the lowest at ~120%.
- The ratio of borrows liquidated (total volume of borrows liquidated / total borrows) came in at .66% for Compound, ~7% for Dharma, and an eye-watering 25% for Maker.
You can read the full report here: https://drive.google.com/file/d/1jR30tqcVylHUVJw31VtqY6gATQkNiYBR/view.