General

Introduction

Interest Protocol is a DeFi application that allows users to swap and lend crypto, fiat, commodities, and assets from other chains.
Interest Protocol consists of three core synergistic products:
  • AMM DEX
  • Lending Protocol
  • Synthetics Protocol

Liquidity Provider Problem

To quote this article.​
“The average liquidity provider (LP) in the Uniswap V3 ecosystem has been financially harmed by their choice of activities and would have been more profitable simply holding their assets.”
The whole incentive system for liquidity providers is broken. They are the lifeblood of DEXs. It is thanks to them that others users can freely swap their tokens. And in return, they suffer a loss for their service instead of being rewarded for it.
Liquidity providers rent out their tokens to DEXs so users can swap tokens in exchange for a profit. However, most of the markets in DEXs are unprofitable for liquidity providers due to the price changes of the assets provided. Furthermore, most of the tokens allocated to DEXs for liquidity are not traded, which makes the entire process quite capital inefficient. Millions of dollars are sitting in DEXs doing nothing.

Solution

On the Interest Protocol, liquidity providers can use their LP tokens as collateral to borrow Dinero, an overcollateralized stablecoin. It allows them to invest this loan in other instruments, such as DeFi dApps, NFTs, long cryptocurrencies, et cetera. The proceeds from investing the borrowed money, coupled with the fact that these loans have no cost and the collateral tokens keep accruing rewards, make it easy to offset the impermanent losses.
It also unlocks the trapped liquidity in DEXs, making the whole DeFi space more liquid.

Synthetics Protocol

Synthetic tokens are derivatives. They are coins with a price dependent upon or derived from one or more underlying assets.
Synthetic tokens have many use cases. They can represent a real-world asset (gold), another blockchain asset (Aptos coin), an NFT floor price, et cetera.
On Interest Protocol users can issue synthetic assets and profit from their transaction volume. These tokens act as the building blocks for developers to imagine new dApps. For example, one can imagine an NFT lending protocol that uses NFT floor price synthetic tokens as collateral.

Why BSC Chain?

Interest protocol opted to start on the Binance Smart chain to benefit from the fast and low-cost transactions and its user base. BNB Chain has over 200 million unique addresses, making it the blockchain with the most users.
DeFi applications suffer greatly from high transaction fees as many investment strategies become unprofitable for smaller investors.
BNB Chain also provides a myriad of benefits to dApp developers, such as refunds on contract deployment costs and customer support for users.
Over time, we plan to deploy in other EVM chains, such as Ethereum and Polygon.

How to Participate in Interest Protocol

Users of the Interest Protocol can participate as liquidity providers, borrowers, traders, or/and community members.
Community Members can join our channels to discuss and propose improvements to Interest Protocol!
Liquidity providers can earn interest fees and Interest Tokens by providing liquidity to our DEX.
Borrowers can deposit assets as collateral and borrow our stable coin Dinero.
Traders can freely trade assets in our DEX.
Liquidators maintain the stability of the protocol by repaying under the water positions for profit.
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