PulseChain offers features that traditional financial products cannot.
Namely, censorship resistance and the ability for significant price appreciation.
PulseChain needs more than just these two, however, if it wants to compete with the current establishment.
For example, it needs peer-to-peer lending, a native decentralized stablecoin, and other DeFi products.
Read on to learn why Liquid Loans is a game-changer and makes significant improvements to the PulseChain ecosystem.
When users lock up their $PLS and mint USDL, they are creating, for themselves, a truly-decentralized, overcollateralized, algorithmic stablecoin.
USDL has many features which gives it this title of True-DeFi.
The LOAN Token is a yield-bearing token, which when staked, generates risk-on returns in the form of PLS and USDL.
The PLS comes from the redemption fees, and the USDL comes from the borrowing fees.
LOAN token is a cryptocurrency with no peg mechanisms, so it will fluctuate in price much like other forms of cryptocurrencies. Since USDL will likely have large liquidity pools with PLS and PLSX, the price will move similarly to them due to Heart’s Law.
The LOAN token is yet another trustless, permissionless, and self-custodial staking token to earn yield on PulseChain.
The Stability Pool allows holders of USDL to earn risk-off, trustless yield.
Much like the LOAN Staking Pool, the Stability Pool does not rely on a central counterparty to earn funds, nor does it require a user to forfeit their private keys.
In contrast, to the LOAN Staking Pool, the Stability Pool is risk-off, meaning that the principal is EXTREMELY unlikely to appreciate or depreciate significantly. If the peg mechanisms hold, USDL won’t oscillate much from $1 USD.
However, it is important to note that the USDL in the Stability Pool slowly converts into PLS. So if you’d like to remain as risk-off as possible, be sure to swap your earned PLS into USDL as often as it makes sense for you.
The Liquid Loans protocol enables PLS holders to extract value from their coins without needing to sell them.
When you open a vault and mint USDL, your PLS stays in your custody. At any time, you can repay your loan and retrieve your PLS.
This provides users with two main benefits:
Liquid Loans is an immutable, audited, and governance-free protocol. It has no repayment schedule, zero-percent interest, community-owned fees and a decentralized oracle service.
If blockchains are going to have a significant place in our lives going forward, the dApps built on top of them need to uphold their same principles of True Decentralization.
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Disclaimer:Please note that nothing on this website constitutes financial advice. Whilst every effort has been made to ensure that the information provided on this website is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we strongly recommend you consult a qualified professional who should take into account your specific investment objectives, financial situation and individual needs.
WaLLrus is the Global Head of Growth and Partnerships at Liquid Loans, and host of The Weigh In With Wallrus podcast series. He has been in the crypto space since 2015, and is widely recognized as a DeFi thought leader and strategist.