Shortly after culling its group of inactive members, certainly one of decentralized finance’s (DeFi) strangest experiments is launching a brand new stablecoin lending product.
On Wednesday Inverse Finance revealed the Anchor Protocol, a cash market constructed round DOLA, a protocol-native artificial stablecoin. Based mostly on “a modified fork of Compound,” in a weblog publish Inverse Finance founder Nour Haridy compares Anchor to Synthetix, which points credit score within the type of artificial belongings again by overleveraged collateral, and Compound, which points credit score within the type of crypto asset loans additionally backed by overleveraged collateral.
Finally, Haridy sees these fashions as offering the identical utility.
“Lending and artificial protocols each provide the identical service: credit score. Anchor brings the hole between them by combining them right into a unified borrowing protocol.”
Anchor goals to perform this with a novel structure that at all times treats the DOLA token as “$1 collateral that can be utilized to borrow different belongings no matter DOLA’s market situations or peg.” Customers deposit collateral, mint DOLA, after which can use DOLA to take out loans in different crypto belongings or just earn yield on DOLA.
Introducing Anchor & DOLA: Capital environment friendly lending, borrowing and artificial belongings (and rather more)
Dropped at you by Inverse DAOhttps://t.co/pOOkp8ECsR
Abstract thread beneath ⬇️
— Inverse.Finance (@InverseFinance) February 25, 2021
“For over-collateralized debtors and leveraged merchants, we provide them a one cease store the place they will share their collaterals throughout their artificial and token borrowing positions, permitting larger capital effectivity and better leverage,” says Haridy.
Haridy envisions Anchor will use DOLA for protocol-to-protocol lending just like Cream’s Iron Financial institution, for undercollateralized lending (lengthy a prize in DeFi), and for the protocol to “lend itself” credit score to pursue yield farming alternatives.
No useless weight
Maybe extra attention-grabbing than Inverse’s growth on the protocol layer are the strikes they made earlier within the week on the governance layer.
In what could also be a DeFi governance first, On Saturday Feb. 20, Inverse group members put forth two governance proposals to grab INV — Inverse’s at present non-transferrable governance token — from inactive group members. On Thursday Feb. 25, the proposals handed, and never everybody was pleased with the end result.
— Knockerton (@knockerton) February 24, 2021
Haridy says that the timing was intentional — proper as Anchor, a protocol that may generate income for the DAO, prepares to launch, the group sheds freeloaders.
“We wanted to weed out our useless weight to reclaim some tokens for re-distribution to new energetic members quickly. We additionally created an INV grants committee with the ability to reward contributors and add new members to the DAO. Moreover, when free riders are eliminated, energetic members turn into extra incentivized to contribute as a result of they get a bigger piece of the pie.”
Whereas the unprecedented transfer could appear harsh, it’s additionally merely making use of to governance the type of aggressive model that put Inverse Finance on the map within the first place. By forcing token holders to take part beneath the specter of seized tokens, it’s helped with the event of Anchor as nicely.
“It is a collaborative effort amongst many DAO members ranging from ideation to growth to inside evaluations and testing,” says Haridy.
The following step for Inverse might be getting Anchor off the bottom, and making ready for a world wherein INV turns into tradable. Haridy says there’s a rising consensus locally for tradability. This may imply that the DAO would quit the ability to grab tokens, which may alter Inverse’s group panorama.
Haridy, nonetheless, appears unfazed by the looming shifts, already making ready the subsequent innovation.
“It will considerably change the present incentives and will scale back participation. Luckily, there’s some work on a brand new various governance mannequin that’s been taking place internally to handle this downside.”