Blockchain technology and related cryptocurrencies are designed to make financial industry tools available to anyone with an internet connection. Like traditional banks, cryptocurrencies offer all the same products, including loans and borrowings, only in a decentralized format to reduce fees and discrimination. Since Decentralized Finance (DeFi) excludes middlemen from the equation, billionaires and ordinary people are given equal opportunity, and higher interest rates prevail. In practice, most decentralized loans today are provided by a credit pool.
Traditionally secured loans (also known as securities-based loans) use valuable assets to secure the loan amount, reducing the risk to the lender – a concept popular in mortgages and car loans. The only difference in setting up a blockchain is that cryptoassets are required to get a loan. Unfortunately, this process can be tricky if users own multiple cryptoassets scattered across multiple blocks. While a true DeFi platform should not be controlled by one party, many of the lending platforms available today operate under strict rules common to centralized businesses. Sometimes these rules can make it difficult for new users to create and manage their own credit groups, or even start lending at all.
Trava Finance aims to address these challenges as the world’s first decentralized cross-lending marketplace. The platform provides users with a flexible mechanism to create and manage their own credit groups by setting their own criteria. The Trava Credit Pool was launched on Thursday 16 September, which marks an important milestone for the team and an opportunity for users to gain an experience with credit protocols.
Asked about their vision for the future of the platform, Dr. Minh Nguyen, CEO and Co-Founder of Trava Finance, said their goal is “to provide users with the best lending experience” by “supporting [l] loan users with data. chain analysis mechanisms “.
Addressing Ongoing Concerns About Decentralized Lending
Trava Finance is published on Binance Smart Chain (BSC), so early stage BSC token lending and cross-chain lending are available, respectively. Additional implementations of this mechanism that Trava offers are credit scores and health assessments. With this data, users will be better able to prevent risks and seize profit opportunities.
Typically in the financial sector, a credit rating is a value used to represent a person’s creditworthiness. A higher score for lenders may indicate that the borrower has a good chance of repaying the loan. On the other hand, borrowers can invest at a preferential rate if they have a high credit rating. Trava works with a similar model, providing users with a credit rating to help them reduce their credit risk and achieve a high credit-to-value ratio. By connecting the wallet, users can see their credit ratings.
Learn more about TRAVA funding here
Points are the total value after Trava Finance collects and analyzes financial transactions from multiple blockchain networks including BSC, Polygon (MATIC) and Ethereum (ETH). Pool users can then set a minimum credit rating for members to mitigate the risk associated with lending.
In addition, Trava Finance uses a firewall protocol to identify the addresses of the same users on different networks. Users can then use all crypto and non-fungible currencies (NFTs), exchange tokens and other digital assets to be pooled as collateral into one loan for a large transaction. NFTs are auctioned to determine the price, and the winners then enter into a loan agreement to make money or buy assets at a low price, which helps facilitate their own loans.
For added security, the Trava Finance smart contract and lending aggregator is currently being revised by the data and auditing platforms Hacken and Certik.
Lending now and in the future
According to CoinMarketCap, just a week after the launch of the Trava credit pool, Trava’s trading volume on TVL reached 13 million, and the maximum 24-hour trading volume reached $ 7.84 million. Trava has also built an active community of 32,000 members and has been featured in over 300 different newspapers and media outlets.
In the last quarter of 2021, the Trava team will share their attention to the launch of the NFT Renting feature, a protocol over chains and the Knowledge Network beta. The platform launches NFT Rentals with an incentive program on October 18, 15:00 UTC. TRAVA is also expected to be listed on SpookySwap on October 20.