There’s no doubt DeFi has completely changed how the world looked at finances. Cryptocurrencies have been hailed as the savior of the masses, but it is DeFi that is deliverance. Providing the maximum benefit to its users, Evolution Finance is a DeFi platform that has been built from scratch, not as a competitor to other DeFi platforms, but to shape the lending landscape forever as it creates an ecosystem that tackles the most significant issues in decentralized finance today.
Unlocking Liquidity: DeFi
But let’s not get ahead of ourselves. Let’s look at what exactly is DeFi. A broad term that covers a range of cryptocurrency-based economics, decentralized finance today, is referred to as platforms that allow people to deposit their assets as collateral and receive loans against these.
Many of you might think, Why not go to a bank instead? Well, for once, you may be right. Getting loans from banks is easy, and with so many product offerings, there are many flexible choices. However, it’s the banks and financial institutions themselves that are the problem. Create a hypothetical situation where you need to finance a small business that you have always dreamt of. To get money for starting it, you will probably go to a bank or another institution for a loan. They would scrutinize your application, look up your credit score, ask you to deposit any asset as collateral (probably your house), etc. and then give you money that is less than your collaterals combined. Plus, they will charge a hefty interest.
On DeFi platforms, the whole process is made extremely simple. You log in, find a product that suits you, and simply deposit the required cryptocurrency in a smart contract and take the loan. There are no paperwork, credit review, or financial checks, and you get the loan at a much lower interest rate since there is no intermediary like a bank.
DeFi has become very popular in the past year, with a locked value above $43 billion at the time of writing, and is expected to continue to grow as people move away from traditional institutes and move towards a more flexible and cheaper alternative.
Not All That Glitters is Gold
Though DeFi is claimed as the most significant thing to happen in the field of cryptocurrency, it has a few drawbacks that are in dire need to be addressed.
The biggest problem is perhaps the use of multiple ecosystems. Though most of DeFi platforms today are running on the Ethereum blockchain, others use TRON, NEW, and other networks. Some even have their own, making it difficult for people with incompatible tokens and coins to get on board. Consider this: if you had an ERC-20 compliant asset and would prefer to gain profits on using a platform that utilizes the TRC format, your only option would be either to forgo the opportunity or to sell off or exchange your held assets into the ones that the platform would accept (with a different profitability ratio).
Farming is the second issue that is most ignored. The process of being rewarded in the native tokens to take part in the DeFi platform and committing your assets is called farming. The longer and more you stake your coins in the pool, the more rewards you get. To ensure that there is always a hefty supply of farmed tokens for its users, decentralized platforms create tokenomics with the tokens’ ongoing issue, leading to inflation and devaluation of the coins in the long run.
Evolution Finance: Holistic and Deflationary
As in its name, the platform is all set to bring about an evolution in the financial game. A DeFi system that caters to the most crucial problems facing the industry at the moment.
Rather than have a new DeFi platform that offered yet again a service that other ecosystems are, Evolution Finance has decided to provide different tokens on its platform, even ones that are not native to its blockchain.
The first step was the selection of the top 50 coins that are most popular in DeFi industry. As most of them were native ERC20 based, Evolution Finance was created on the second-largest coin’s network, allowing for maximum tokens to be added in its financial setup. Secondly, for the tokens and coins that are not on the Ethereum blockchain, Evolution Finance decided to create wrapped tokens for each ERC compliant.
Wrapped tokens on Evolution Finance are basically ERC compliant tokens backed by the original coin in a 1:1 ratio. For example, if you want to enjoy the meteoric rise of BTC, but have only ETH, you could deposit your ETH and get wBTC, which is ERC based token that represents the price of Bitcoin. This way, you can lend and borrow in BTC on Evolution Finance.
Secondly, rather than have an inexhaustible supply of its native EVN, it is limited to only 300,000 tokens in totality. This means as more and more people join, the token would get scarcer and jump in value. Furthermore, a small portion of the tokens will be burnt, creating pressure on EVN’s upward value.
Our Take on the Project
Evolution Finance is a one-of-a-kind DeFi project set to free the whole industry from trapped liquidity that’s spread across different platforms. The project has caught the attention of major players in the industry, including DAO Maker, which has a streak for backing up projects that have the potential to grow big.
Using its unique approach to allowing lending and borrowing of non-native coins through wrapping and having a deflationary token that is not only limited in quantity, but a portion is burnt constantly to dwindle its supply, Evolution Finance is all set to reshape the DeFi market.
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