Why is Paribus the Future of DeFi?
Decentralized finance, since its inception during the infamous ‘Defi Summer’ of 2020, has grown to a considerable height. We now hear news of banks trying to incorporate blockchain technology( like the PBOC of China) and offer their services in a decentralized manner e.g, Lending. We all know the stress one has to go through to obtain a loan from a bank. Have you been there? The endless meetings, paperwork, and associated stress are too cumbersome and time-consuming.
With Defi, these processes could easily be forgone, allowing users to interact seamlessly with smart contracts on which the borrowing and lending process is hosted. This means that users get to borrow or lend without worrying about the gruesome efforts or the enormous time it would take them to complete this rather simple task.
Talking about lending and borrowing, Paribus is not too out of the picture. Paribus is a collateralized loan platform aiming to generate more liquidity for the Defi ecosystem by tapping into “underserved markets”. Paribus brings a different initiative to the lending space by asking the question, “Can we generate liquidity by allowing users to borrow against their illiquid assets e.g, NFTs, Synthetix e.t.c”. The common idea in the Paribus ecosystem that fuels this thought/initiative is this “ If it can be verified, it can be sold. If it can be sold, there is intrinsic value. If there is intrinsic value, this value can be leveraged”.
By allowing users to generate liquidity against these assets, Paribus consolidates Defi growth- the ultimate goal and also unlocks new ways for users to both bear yields from these assets and also acquire loans from them. Liquidity! This value proposition cuts across basic assets like ADA, ETH, DOT and also non-fungible assets like NFTs and Virtual lands.
Built of Cardano
Paribus runs on the Cardano blockchain- a next-gen blockchain that leads the pack for its remarkable interoperability feature. By plugging into this functionality, Paribus consolidates on the future of Defi lending, which is highly interoperable and unlocks a new feature of chain agnostic lending/borrowing. This move would also allow the Paribus protocol to simultaneously connect innumerable assets across multiple blockchains, thereby enabling the free flow of value and inhibiting restrictions between blockchains.
Also, being a DAO, Paribus would be open source; therefore, its source code would be open to the general public for free use after it has been audited and rigorously tested. In addition, the Paribus protocol would inherit the basic characteristics of a dApp which would see it being non-custodial, trustless, permissionless, and censorship-resistant. This is great for users as these features enhance user experience.
In conclusion, the growth of the rather nascent stage of this Defi evolution has been hampered by liquidity. Everybody is buying into the idea of doing it ‘on-chain.’ Trustless, and seamless, coupled with several advantages, make Defi the “go-to” for the various ills plaguing our traditional financial system. To plug this gap, Paribus attempts to generate liquidity from a rather unprecedented source of “non-conventional assets,” which include assets ranging from LP tokens, Virtual land, and NFTs (Audio, GIFs, Digital art). By allowing users to borrow against these assets, liquidity is generated, and users are equally rewarded as they get to access liquidity from a rather illiquid source. This initiative is genius, and I would like to invite you to hop on this bandwagon as the evolution of Defi lending is within your reach.
Learn more about Paribus and keep you with all their recent news and developments via the following links: