Hashstack launches the open protocol Testnet, bringing the first-ever under-collateralized loans to DeFi space
As you probably know, the decentralized finance (DeFi) lending landscape is plagued with a serious flaw: over-collateralization, the provision of collateral that is worth more than enough to cover potential losses in cases of default. For instance, if you want to borrow $100, you have to put in at least $142 worth of collateral.
Now, Hashstack Finance finally fixes this flaw with its Open protocol that aims to disrupt DeFi lending by eliminating inefficiencies, facilitating, and enabling loans at up to 3x collateral. With Hashstack, you have to put only $33.33 rather than $142 as collateral to obtain a $100 loan.
Today, Hashstack announced the testnet debut of its Open protocol, the first-ever DeFi lending protocol to offer non-custodial, secure under-collateralized loans. The milestone marks a significant accomplishment in Hashstack’s roadmap as it prepares to launch the Open protocol mainnent in the coming weeks.
Open protocol is the only autonomous lending solution in DeFi that enables under-collateralized loans up to 1:3 collateral-to-loan ratio. It means you can borrow up to $300 by providing only $100 as collateral. Of this, you can withdraw $70 (i.e. upto 70% collateral), while utilizing $230 as in-platform trading capital.
Hashstack Finance founder Vinay said, “Today, if you want to borrow $100 on Compound, or Aave, or even MakerDAO, you are required to provide a collateral of at least $142. This breaks the primary intent behind loan procurement, and has restrictive use-cases for the borrower. In comparison, through Hashstack’s Open protocol you would be able to borrow the same $100 with collateral as little as $33.33. This 4.25x value-add against every established market player today, is a remarkable milestone for the defi ecosystem in general, and will drive further adoption.”
While the current DeFi lending protocols require over-collateralization, Hashstack is proud to give borrowers a glimpse into the future of DeFi lending. Whether you need to borrow for personal cash needs, leveraged investments in IDOs, or trading capital, Open protocol offers instant under-collateralized loans.
To accelerate the growth of DeFi lending, Hashstack’s Open protocol eliminates inefficiencies from the DeFi ecosystem through a three-pronged approach: clear compartmentalization of APY and APR of deposits/loans with that of their minimum commitment period (MCP), effective asset utilization through diversification of available assets via lending and providing trading capital, and under-collateralized loans.
Hashstack integrates with other DeFi solutions such as Pancakeswap to facilitate in-app market swaps and to improve loan utilization. It means the borrowers can swap the borrowed tokens into other primary coins or secondary coins without the need to switch the dApp. The open protocol also bridges assets from other chains such as Ethereum and Avalanche C-chain as an expansion of the primary markets.
To begin with, the Open protocol supports only major liquid coins such as BTC, USDT, USDC, BNB, and Hashstack’s native governance token HASH.
Founded in 2020, Hashstack Finance is a DeFi platform whose Open protocol aims to disrupt the DeFi lending market by offering under-collateralized loans. It addresses the need of lacking under-collateralized lending avenues for retail cryptocurrency investors by enabling loans at up to 3x collateral to serve the personal financial needs and trading capital requirements. Users can secure under-collateralized loans to avoid having to sell their long-term holdings to meet their short-term cash needs.