The Lending, Borrowing and Staking Utilities of Paribus.
Paribus, which is based on the Cardano blockchain, is a chain-independent protocol that hosts a wide range of cross-chain interoperable decentralized financial instruments, giving owners of non-fungible tokens (NFT) new uses and income streams.
Paribus enables users to tokenize any verifiable off-chain asset by merging a cutting-edge approach to non-fungible tokens (NFTs) with decentralized finance (DeFi). By making use of the borrowing and lending protocols of the Paribus, users can take advantage of these NFTs and put assets that were previously underutilized to new use.
The ultimate objective of the Paribus protocol is to harness untapped on-chain value across the entire crypto industry as it strives to create cross-chain liquidity for a wide range of traditional and non-traditional digital assets, such as liquidity positions, synthetics, virtual land, and NFTs.
In this article, we’ll discuss Paribus, and how it enables users to benefit from lending, borrowing, and staking synthetic assets.
Paribus provides a product line for borrowing and lending to increase the underlying assets’ leverage in order to fulfill more complex use cases using Synthetics and LP tokens.
LENDING
Paribus provides investors the option to get passive income from their virtual assets rather than having them sit around doing nothing for them if they don’t want to sell them permanently.
In the Paribus ecosystem, lenders act as liquidity suppliers and are paid interest in exchange. Since Paribus offers Deposit APR based on factors like utilization rate, lenders may utilize the Deposit APR for any specific asset to anticipate their revenues.
When the pledged collateral for the loan drops below a certain value level or when the price of the lent asset rises over a predetermined value threshold, the platform goes into liquidation.
BORROWING
Paribus serves as a platform for collateralized loans, hence, each borrower must deposit an asset of their own to use as collateral.
Non-fungible token collateral-based loans are available to users on the Paribus protocol as they can utilize any NFT asset in their possession as collateral to acquire loans.
As the value of the asset increases, customers may then borrow funds against the underlying NFT. Paribus also suggests a set of smart contracts that allow for collateralization utilizing Virtual Lands.
Holders of LP tokens can use their investment as collateral when applying for a loan. On the Paribus platform, all loans have 100% collateralization. This makes the platform secure, self-sufficient, and expandable.
On the Paribus protocol, a borrowing cost is assessed for each borrowing operation. This had a value of 0.2% as of the time of writing. (However, this rate may alter as a result of a voting process for governance). The fee will be included in the total amount borrowed and shown on the user’s dashboard. Upon collection of these payments, the protocol reserves will be raised. This fee serves as a “safeguard” to prevent the mistreatment of short-term borrowers.
Note: Paribus loans do not include a payment schedule for either traditional or exotic assets. The borrower decides when, how frequently, and how much to pay back. Nevertheless, users are advised to pay attention to the interest rates and liquidation zone.
STAKING
Users have access to multiple market-specific staking pools for LP tokens using Paribus. On Paribus, native staking for the PBX token is made available, offering a dynamic APY and significant rewards. By staking their LP tokens, liquidity providers from other third-party platforms can also earn incentives.
Hence, users can stake their NFTs with Paribus in similar NFT pools. As a result, users begin to earn a yield on their assets, generating a passive income stream.
All PBX token holders have the chance to generate passive income by staking their tokens in a tiered system — With larger stakes come greater levels and higher percentages. Holders of PBX tokens are compensated with a part of platform fees in PBX tokens.
By taking out loans against their stakes in liquidity provider (LP) tokens, users of the Paribus network may leverage their holdings as LPs. Full collateralization allows Paribus users to borrow against the liquidity positions of several automated market makers (AMMs).
Hence, Paribus provides DeFi investors with a platform for expanding the global reach of their digital assets and positions as the capability of borrowing and lending against a broad range of assets is being combined for the first time on one platform in a decentralized, permissionless manner.
Ensure that asset exchange rates accurately represent their genuine value, Paribus makes use of the most dependable and trustworthy price feeds from Oracles. In addition to combining quotations from the top twelve exchanges to provide its end users with the best rates.
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