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Alisa Davidson
Published: November 01, 2024 at 12:02 pm Updated: November 01, 2024 at 12:02 pm
In Brief
Hedera’s new liquidity layer, Bonzo Finance, enables both retail and institutional users to earn yield, lend, and borrow assets through overcollateralized and flash loans.
The proof-of-stake public network Hedera announced it has launched its liquidity layer, Bonzo Finance, which is aimed at providing both retail and institutional users with access to advanced decentralized borrowing and lending features unique to the Web3 landscape.
Bonzo Finance takes full advantage of Hedera’s Ethereum virtual machine (EVM) equivalence, tooling, and mirror node infrastructure, creating a symbiotic relationship that ensures high efficiency, low costs, and a user-friendly experience. The protocol supports a variety of assets, including HBAR, HTS tokens, and stablecoins like USDC, allowing users to engage in overcollateralized lending and borrowing across the Hedera economy.
The overcollateralized loan system enables borrowers to secure capital by depositing collateral into single-asset liquidity pools, with loan-to-value (LTV) ratios designed to maintain the protocol’s stability. For more advanced users and developers, Bonzo Finance offers flash loans—instant, uncollateralized loans that facilitate more complex decentralized finance (DeFi) operations.
Lenders can earn competitive, auto-compounding yields on their deposited assets, with interest rates dynamically adjusted according to market demand, thus optimizing capital efficiency. User experience is further improved through seamless integration with ecosystem wallets like HashPack, Kabila, and Blade via WalletConnect, with support for MetaMask (Snaps) anticipated soon, broadening accessibility for users.
Bonzo Finance Employs Verifiable Points Program, Integrates Hedera’s Oracle Price Feeds
Furthermore, the protocol is transforming incentive models within the Hedera DeFi ecosystem through a points program based on the HCS-20 (Hedera Consensus Service) standard. This program utilizes Hedera’s Consensus Service (HCS) to establish a verifiable, transparent, and auditable rewards system. Additionally, Bonzo Finance has integrated Supra oracles, with plans to include Pyth and Chainlink, ensuring accurate and timely asset pricing. The implementation of multiple Oracle solutions enhances the protocol’s resilience against potential failures or attacks.
The introduction of Bonzo Finance aims to contribute to key areas, encompassing stablecoin liquidity and utilization, wrapped (bridged) asset Support, as well as DAO governance.
Hedera is an open-source, decentralized public ledger that operates on a PoS model and employs the leaderless asynchronous Byzantine Fault Tolerance (aBFT) hashgraph consensus algorithm. It is governed by a collusion-resistant, decentralized council of leading enterprises, universities, and Web3 projects from around the world.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa Davidson
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
More articles
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