DUBAI, UAE / ACCESSWIRE / October 22, 2021 / The DeFi and NFT platform, SYNC Network, recently announced the launch of peer-to-peer lending on its platform to offer heightened security to lenders.
SYNC, the Ethereum-based platform, aims to mitigate risk and bring stability to the DeFi space with the help of time-locked, reward-generating NFTs called CryptoBonds. To put this into perspective, the value of 1,800 CryptoBonds created so far has seen an average increase of over 203%, which easily covers the recent downtrend in crypto that led SYNC to drop by 75%.
Ever since its inception, SYNC has seen steady growth and has recently managed to bag collaborations with some prominent names in the DeFi space such as TrustSwap (SWAP) and DexTools (DEXT). Now, in a recent development, the SYNC Network announced the launch of 100% secure peer-to-peer lending on its platform.
The platform claims that this move is enabling users to lend and borrow capital on CryptoBonds in a trustless manner. Borrowers on the platform can use the CryptoBonds, which consist of the liquidity pair and equivalent SYNC tokens, as hard collateral to borrow capital. Within the SYNC ecosystem, the duration of the loan and the rates of interest are dynamic and are agreed upon by the borrower and lender.
According to the developers of the SYNC Network, this method of lending against a CryptoBond can provide unprecedented levels of security for lenders and borrowers alike. Borrowers on this platform are not subject to minimum collateral maintenance. If the value of the collateral fluctuates during the course of the loan, borrowers do not get liquidated.
For lenders, the collateral is stored in ESCROW for the duration of the loan. If the borrower fails to pay the loan, the lender becomes the new owner of the said CryptoBond, protecting the lender from financial risk.
The lender also gets a promissory note NFT – a debt note much like real-world promissory notes is a tangible representation of the loan. If at any point the lenders want their lent sum of money back before the specified maturity period, they can sell their NFT on an NFT marketplace. The user who buys their NFT would become the new lender while the previous lender would get back his funds without the liquidity being disturbed.
The introduction of P2P lending against a new asset class – CryptoBonds – could potentially create a safe space for both borrowers and lenders. It can strengthen the DeFi ecosystem by ensuring that the liquidity in the CryptoBond is untouched through the entire ordeal.
While the SYNC Network is currently deployed on the Ethereum mainnet, the platform is working on a version 2 (V2) network that could come with multichain and multi DEX functionalities, taking a big leap into the wider DeFi ecosystem.
Scott Bondsman – CEO
SOURCE: SYNC Network
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