OpenLeverage, a permissionless lending and margin trading protocol invested by Binance Labs, has announced the launch of a new Permissionless Money Market feature on Arbitrum, which aims to provide greater flexibility in the market for Arbitrum users. This new feature allows users to deposit any crypto asset as collateral and borrow against it, unleashing liquidity in the market.
OpenLeverage has already successfully launched its Permissionless Money Market feature on the BNB Chain last month, which has seen more than 850 borrowing pairs established and over $700,000 worth of assets borrowed in just two weeks.
Bridging the gap for altcoins
As of March 2023, over 22,900 tokens exist on the cryptocurrency market, boasting a combined market cap exceeding $1.1 trillion (according to CoinMarketCap data). Despite this vast market, most assets lack access to fundamental cryptocurrency financial services like deposit-to-earn and borrowing. Instead, they are limited to pass-through issuance and decentralized exchange trading.
Leading crypto pledge-lending platforms, such as AAVE and Compound, support only a small fraction of tokens (13 and 20 tokens, respectively). This exclusion of 99.99% of tokens from lending financial services presents a conundrum that has captured the attention of many in the crypto space. With over 22,000 assets and a market capitalization surpassing $150 billion, the market actively seeks a suitable financial service.
Unleashing More Opportunities for Arbitrum’s Long-Tail Market
Arbitrum is the most popular Layer-2 in the current cryptocurrency market, with a TVL of over $7 billion. OpenLeverage has achieved impressive results on the network, with over $65 million in trading volume within two months.
There are over 289 protocols on Arbitrum, and even more tokens, but less than 5% of these tokens can enjoy borrowing services, leaving a large number of projects excluded. OpenLeverage’s Permissionless Money Market provides a new opportunity for these long-tail market projects.
OpenLeverage’s Permissionless Money Market has gained support from leading DeFi protocols on Arbitrum such as GMX, Gains Network, Radiant, and Buffer Finance, and has been welcomed by the Arbitrum ecosystem.
Introducing OpenLeverage’s (OLE) Permissionless Money Market
As a fully permissionless and scalable margin trading protocol, OpenLeverage introduces its Permissionless Money Market, enabling users to create a lending and borrowing marketplace for any token pair. This approach fosters more efficient capital use and helps users benefit from arbitrage opportunities.
For example, OpenLeverage’s over-collateralized borrowing feature enables the community to create lending pools for tokens like OLE, even if other lending markets do not accept them. The OLE-USDT over-collateralized lending pool lets users freely deposit OLE and borrow USDT.
Additionally, OpenLeverage aims to enhance fund usage efficiency by offering more funds to borrow than other platforms.
OpenLeverage’s Permissionless Money Market also boosts liquidity for numerous token pairs on the chain, allowing users to lend more assets and margin trade across OpenLeverage’s token pairs and provide leverage to any on-chain token. Users can enjoy additional rewards for using this feature, earning rewards for lending in addition to APY for deposits.
This creates a new arbitrage opportunity: lending long-tail tokens with high APY by depositing stablecoins or mainstream tokens like ETH while generating revenue without exposure to the long-tail tokens’ price fluctuations.
Rewards Distribution Enabled
As the Permissionless Money Market feature gains recognition among projects, OpenLeverage enhances the ability of project owners to offer token rewards. Any project or community can now add trading and lending rewards to any pool on OpenLeverage.
This development has significant implications for projects previously excluded from the lending markets. By encouraging projects to deposit their native tokens to reduce token circulation, incentivizing deposits to increase liquidity, and allowing for leverage, OpenLeverage’s Permissionless Money Market helps projects better drive their token economy.
OpenLeverage’s Permissionless Money Market is already deployed on BNB Chain and Arbitrum, with plans to expand the feature to Ethereum,KCC and other chains in the near future. With this groundbreaking feature, OpenLeverage aims to reshape the lending landscape and empower the entire cryptocurrency ecosystem by unlocking new opportunities for users, project owners, and communities.
As OpenLeverage continues to innovate and expand, its Permissionless Money Market will play a pivotal role in fostering a more inclusive and robust lending environment, ensuring that no token is left behind in the ever-evolving world of cryptocurrencies. The future looks bright as OpenLeverage paves the way for a more accessible and dynamic financial landscape within the cryptocurrency market.
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