Lends (LENDS): Unlocking Efficiency in P2P Lending

Decentralized finance (DeFi) is one of the busiest facets of crypto, with a steep competitive landscape. Borrowing and lending are critical components of DeFi and have funneled its explosive growth. Unfortunately, users of DeFi protocols involved in these activities often face the risks of liquidation and exorbitant interest rates.

Against the backdrop of these challenges, Lends (previously Lendscape) has created a way out by building the first decentralized lending protocol on THORChain. Lends hopes to leverage the THORChain cross-chain decentralized exchange (DEX) platform to offer a unique value proposition to DeFi lenders and borrowers. Let’s learn more.

Key Takeaways:

• As the first decentralized lending protocol on THORChain, Lends has created a transparent and fair ecosystem in which you can lend or borrow with no liquidation and zero interest.

• Its token, LENDS, is used to accrue value on the platform through staking to earn xLENDS and vxLENDS tokens, or yield farming through liquidity provision.

• Some of its notable products are Lends DEX, which uses automated sub-swaps for efficient token swapping, and ThorFi for borrowing and lending.

What Is Lends?

Lends is a fixed-rate, cross-chain peer-to-peer lending platform powered by THORChain. It’s designed to provide DeFi users with fixed-term loans in a safe and transparent way. Lends aims to provide efficient P2P lending with no liquidation risk at zero interest rates, and without relying on external oracles.

The platform is native to the Arbitrum ecosystem because of the blockchain’s fast and low cost of moving assets. However, Lends may integrate blockchains such as Bitcoin and Ethereum in the future. Furthermore, Lends is working hard to fill the void in the Cosmos ecosystem and in proof of work (PoW) chains that lack a fully decentralized autonomous lending protocol.

With Lends, you can borrow against assets such as BTC, ETH and BNB, among others. For lenders, the platform has an efficient and safe system, powered by smart contracts, that releases funds to known counterparties with minimal chance of default.

Why THORChain?

To power its vision for decentralized borrowing and lending, Lendscape opted to use THORChain for its foundational technology. As a cross-chain liquidity protocol, THORChain offers easy and seamless swapping of native assets across different blockchains and supports the building of DeFi projects on its platform.

The THORChain ecosystem is powered by Cosmos SDK and Tendermint, which enable fast and flexible creation of blockchain-powered applications. As such, THORChain requires deep liquidity in order to facilitate platform transactions aligned with Lendscape’s ambitious lending vision for DeFi.

Furthermore, THORChain’s ability to facilitate cross-chain swapping of Layer 1s (L1s) and native assets such as ETH in a noncustodial way is desirable, since it securely integrates with a wide range of blockchains. Additionally, THORChain supports the redemption of synthetic assets across the Cosmos ecosystem, further enhancing deep cross-chain liquidity. This feature is pivotal to Lends because it allows the transparent exchange of assets at fair prices.

Overall, Lends believes THORChain’s ThorFi product, which facilitates borrowing at zero interest with no liquidations, is a perfect match for its ecosystem.

How Does Lends Work?

Lends relies on an intricate interplay of borrowers and lenders to drive activities on its platform. Here’s how it works.

Lenders

Lends has advanced risk assessment and data analysis tools to gauge borrowers and protect lenders against losses. These tools assess factors such as repayment and credit history, loan-to-value (LTV) ratios and the value of collateral posted.

Lends then assigns a score that lenders can look at to determine the creditworthiness of borrowers. The platform then matches lenders with borrowers through a smart contract, ensuring they receive favorable returns on the funds they loan.

To sufficiently meet borrower demand, Lends offers rewards to lenders and ensures there are adequate loan management and analytical tools on the platform to meet the loan requests. You can easily exit loan positions as a lender, since the loans are tokenized as non-fungible ERC-721 tokens that can be quickly liquidated in secondary markets.

To prevent default, Lends assigns a credit score to borrowers, who also have to post collateral when taking a loan and may face liquidation (in extreme cases) to recover the loaned funds.

Borrowers

As a borrower on Lends, you’ll be matched with a favorable lender(s) based on suitable interest and maturity dates. The platform employs an automated loan order management system that efficiently matches loan requests with available funds. In addition, loans on Lends are powered by smart contracts, eliminating hidden fees common with traditional bank loans. For transparency and auditability, the entire loan origination process is recorded on the blockchain.

Unlike most traditional banking institutions, the borrower is well aware of the liquidation mechanism that may come into play in case of default. They’ll receive automated, timely notifications if and when the liquidation threshold approaches.

Overall, lenders and borrowers can access the necessary tools and details, such as loan performance, to assess risk and make informed decisions.

Lends Key Products

Since Lends borrows heavily from THORChain’s underlying technology, its platform can efficiently tap into ThorFi in order to cater to the needs of DeFi users. Lends' core products are as follows.

Lends DEX

Lends DEX supports the efficient swapping of single L1 assets. The Streaming Swaps feature divides a large swap into sub-swaps, ensuring fast and cost-effective swapping at an optimal price and with minimal slippage.

The benefits of Streaming Swaps on Lends include lower fees (due to automatic breakdown of swap size), less slippage, increased network efficiency and optimal rates on swaps.

The major difference between the Lends DEX and other token-swapping providers is that its platform has automated the swap optimization process, which otherwise often involves a tedious multistep process.

ThorFi Lending

With ThorFi Lending, you can borrow and lend at zero interest rates, with no liquidations and/or expiration dates. ThorFi’s Lending model is based on overcollateralization and burning of RUNE, the native token of THORChain, rather than accruing interest.

The benefits of Lends ThorFi Lending include a transparent lending process and hassle-free borrowing, so you won’t come across fluctuating rates and stressful margin calls. As a lender, you’ll have the chance to offer your BTC and other assets as collateral — and to earn from them, rather than selling them.

ThorFi Savers

Lends (via the ThorFi Savers product) lets you earn on single assets through yield farming by locking them in the savings vaults. The assets supported by this product include BTC, ETH, AVAX, ATOM, BNB, DOGE, LTC and BCH.

ThorFi Savers works in a simple and efficient way; you mint a synthetic-derived asset such as THOR.USD or THOR.BTC, lock it in a vault that assigns you a tracking unit, and then the derived asset is used as collateral, earning you yield, which you can withdraw at any time.

The benefits of using THROFi Savers include zero impermanent loss, full custody over your assets since it’s non-custodial, and transparency since everything is recorded on the blockchain.

What Is the LENDS Token?

LENDS is the intrinsic utility token for the Lends protocol. It’s primarily designed to stimulate engagement within the Lends ecosystem. You can use it for staking to earn rewards passively or to provide liquidity to generate revenue.

To ensure an efficient and sustainable value accrual structure for LENDS, Lends has the following in place:

• Those who retain their LEND tokens by locking them in vaults or loan pools are incentivized with generated revenue.

• LEND is a governance token that you can use to vote on crucial matters on Lends.

• Lends has a rebate system that rewards LEND stakers who receive a portion of the fees collected.

Note that you'll have to stake your LENDS to receive xLENDS before you can be eligible for the value accrual methods listed above. You can also choose to stake the xLENDS tokens to earn vxLENDS tokens for additional rewards.

LENDS has a total supply of 625 million tokens, allocated as follows:

• Seed round — 36.8%

• Strategic round — 8%

• Public round — 1.52%

• Liquidity $ market making — 5%

• Team and advisors — 5%

• Treasury — 9%

• Ecosystem — 34.68%

More on metrics for the LENDS token is shown below.

Where to Buy the LENDS Token

You can buy LENDS on Bybit as the LENDS/USDT Spot trading pair. To trade, you’ll need to sign up on the platform, verify your identity, fund your account and proceed to trade LENDS.

Should you decide to trade LENDS between now and Feb 23, 2024, you have the opportunity to participate in a prize pool totaling 70,000 USDT.

Up to 2,000 new users can earn 30 USDT by accumulating 100 USDT worth of LENDS, or depositing 100 USDT to trade any amount of LENDS. If you're an existing Bybit user, you can still earn 5 USDT either by accumulating a deposit volume of 100 USDT worth of LENDS, or depositing 100 USDT and buying at least 100 USDT worth of LENDS with your Bybit account. Eligibility is limited to the first 2,000 existing users, so there's no better time to get your hands on LENDS tokens.

Closing Thoughts

Lends is the ideal gateway for DeFi users looking to leverage THORChain’s innovative technology. THORChain’s ecosystem is poised for substantial growth within the DeFi crypto space, and Lends is looking to capitalize.

As the first decentralized lending protocol on THORChain, Lends provides a first-mover advantage to DeFi investors. Whether you’re a lender or borrower on the platform, you can participate in a transparent and fair lending platform leveraging technology to accrue user value. Better yet, you get to earn passively by holding the LENDS crypto.

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