What's Crypto Lending, and why is the Nolus DeFi Lease Hailed as the Future of DeFi?

When talking about crypto lending, look at it like traditional banking, but now focused on cryptocurrencies. In the centralized banking sector, customers earn interest on their savings in dollars or pounds while in the decentralized realm, crypto users deposit their coins in crypto lending platforms and earn interest from these deposits, but in digital assets.

At first glance, crypto lending accounts work just like the savings accounts offered by banks but now with digital assets instead of fiat money. A crypto user opens an account with a crypto lending institution, deposits cryptocurrency, and earns interest from their deposits. Most crypto lending platforms usually pay interest in the same deposited currency with some having rates that change daily and others have fixed rates and the funds might be locked up for a fixed period.

Decentralized finance (DeFi) has witnessed multiple emerging technologies that aid in placing Blockchain technology on a global podium, which ensures the technology reaches the masses that truly need it. Some of the emerging technologies trending in DeFi include self-repaying loans, crypto bridges, synthetic securities, and the upcoming DeFi Lease solution by the Nolus Protocol. Looking at these emerging technologies, one can deduce that crypto lending is one corner of the digital asset market that is booming, especially over the last two years with the world's soaring interest in cryptocurrencies.

Let’s dive into the crypto lending space for a clear picture of what’s new, what’s old, what needs revamping, and what the future holds for this space.

The Current Crypto Lending Scene

The cryptocurrency space has witnessed an increase in the number of retail investors over the past few years, with this increase resulting in a scramble among companies providing DeFi services to up their game. This is an indication of a growing acceptance of crypto as an asset class as retail investors are stepping away from their comfort zones in legacy finance systems.. The growth of DeFi due to the adherence of new users to crypto-related projects has significantly improved the current financial ecosystem by ensuring openness, transparency, and a competitive market.

DeFi has made a name for itself as a working option through which users can leverage to earn income through their crypto assets and also expand their portfolio in this type of asset. Regardless of the solutions DeFi offers to remove deadlocks and barriers witnessed in traditional finance, further adjustments need to be made to rid the ecosystem of the existing issues.

A lack of transparency, high costs, and economic exclusion are just but a few problems within the traditional financial system. Blockchain technology has, in some way, rid the finance sector of these problems by employing immutable and publicly verifiable solutions. Compared to other technologies, Blockchain is in its infant stages, therefore, might have a few shortcomings that need to be ironed out as time moves along and innovative ideas in the space turn into reality. Over-collateralization is one such shortcoming in this budding sector that makes lending quite unfavorable by locking up significant amounts of capital to manage counterparty risk, which could otherwise be put to use in the markets. Asset ownership is another issue in the crypto lending space as users are not given true ownership over the digital assets they borrow. In the current crypto lending market there also exists a risk of liquidation as the existing platforms expose their users to a high risk of liquidation that could lead to total loss of their equity.

To rid the crypto lending space of these issues, one project is making waves with a novel lease solution. The Nolus Protocol is an upcoming decentralized finance project that solves the over-collateralization, asset ownership, liquidity risk issues, among others with their unique DeFi Lease solution.

A Brief Overview of the Nolus Protocol

The Nolus Protocol is a Web 3 financial solution focused on surpassing the competition in matters of crypto lending while solving the issues seen in legacy financial systems. Through their innovative product, Nolus DeFi Lease, the protocol breathes new air to money markets by defining a new and improved money market between lenders looking to earn a yield on their assets and borrowers looking to borrow more assets than their current equity.

This novel solution from Nolus is a crypto agreement where the protocol provides financing towards the user to purchase more units of the desired digital asset than their currently available equity. Compared to traditional finance and even other players in the crypto lending ecosystem, Nolus DeFi Lease allows crypto users to obtain a financial product that is flexible in terms of duration and repayments. Users only need to provide a down payment to enter the contract and use the product for as long as desired. No early repayment fees, monthly charges, penalties, or additional fees apply. Once the Lease is fully repaid,all leased assets are released to the user.

Other features only unique to the Nolus Protocol include:

• Providing financing up to 150% on the initial investment. This reduces the collateralization level by a factor of 3.
• Their lease solution boasts of 40% lower liquidation rates compared to the market average.
• Nolus ensures asset ownership lies with the user.
• Lower total transacting and financing costs

Winding Up

As these emerging technologies keep growing, the crypto lending space should continue learning and watching the ecosystem evolve through unique solutions like DeFi Lease. Those that have been within the crypto lending space and might have stagnated ought to learn from Nolus that Blockchain technology is programmable, so innovations to varying issues should be sought to solve the underlying issues plaguing current DeFi product lines. Innovation in the crypto lending realm is the key to bringing novelty to the existing lending and borrowing processes, which leads to better customer satisfaction, increased market share, and revenue.