The Force Research | The “Lending Wave” Behind Filecoin Mortgage

The original law stipulated that 24% interest rate was the upper limit of judicial protection, but now this standard has been lowered;

The state controls private lending through macro-control, which to a certain extent limits the profiteering behavior of private lending.

Many lending projects in the market do not have real landing scenarios. In March this year, Compound triggered a craze for DeFi liquidity mining, which resulted in a short-lived wave of 100-fold returns. Many blockchain projects followed suit, but due to the lack of sufficient application scenarios and target users, they were ultimately short-lived.

Putting the cart before the horse: high-yield lending has degenerated into a speculative craze. Many tokens derived from the lending market have seen their prices plummet due to insufficient incremental lending in the subsequent market, and their returns of a thousand times have dropped in an instant, returning to their original form;

Innovative application of machine gun pool. The DeFi craze has spawned an innovative product "machine gun pool", such as YFI and YFII. The machine gun pool is similar to the GP in the investment field. Its main function is to collect more funds in the market and make more advantageous mining investment behaviors with a large volume.

The loan period is 3 months and the fixed return is 3%. CoinList stipulates that the loan period is 3 months, there is no flexible time period to choose from, and it cannot be terminated early. The annual return on FIL deposits in CoinLits is 12%, that is, the return for the three months is 3%;

Over-collateralization of 125%. All borrowers must guarantee 125% of the loan collateral, and the collateral is mainly mainstream crypto assets such as BTC, ETH and USD. If the collateral price is insufficient, additional collateral is required;

Open lending platform. CoinList adopts an open lending method for borrowers. After the application is submitted through the platform and approved, the funds will be issued.

Huobi endorses HFIL. As the acceptor of HFIL, Huobi guarantees that the redeemed FIL can be withdrawn at any time;

Huobi partners as distributors. Huobi has expanded HFIL lending through some deep partners, including Uniswap, Curve, Balancer, Nest, ForTube, etc. Taking ForTube as an example, it has lent more than 4,000 HFIL, with an annual deposit interest rate of nearly 400%. However, the author observed that the amount of the loan has not changed much for many days, and whether there are a large number of real borrowers is worth further investigation;

HFIL has greatly activated the liquidity of the market with the help of Ethereum to a certain extent. Filecoin originally planned to open a decentralized lending platform based on Ethereum and Filecoin, but because cross-chain technology is difficult to achieve in the short term, Huobi uses HFIL on Ethereum for exchange. This behavior continues the concept of Protocol Labs to a certain extent. At the same time, Ethereum has a large customer base, which is more convenient for the development of HFIL lending activities.

The operation of FIL on Binance is simpler. FIL on Binance is flexible, with an annual interest rate of 6.7%, which is equivalent to a bank current deposit, that is, you can get interest income every day and withdraw cash at any time;

The interest rate difference between different platforms is large, and there is room for profit. At present, the circulation of FIL is small, and the demand for lending is large, resulting in a large difference in lending interest rates in the market, and there is a certain profit space between different platforms.

Decentralization vs. Centralization: Is the interest rate freely priced? The author believes that in addition to asset ownership being guaranteed on the chain, free interest rates are also a way of presenting DeFi. ForTube matches HFIL lending in the form of over-collateralization through the introduction of decentralized wallets. For decentralized lending, its market depth and user demand are still uncertain factors;

Different storage cycles: Risk and return are positively correlated. Some lending activities may have a regular commitment cycle, and in the event of a major market situation, the funds may not be converted into cash in a short period of time. On the other hand, demand deposits are relatively easy to operate, but the returns are relatively low;

An annual lending rate of less than 20% is more reasonable. Many platforms provide FIL lending services, and most of the annual lending rates are less than 20%. If the annual interest rate is higher than this standard, the security of the platform needs to be considered.