Cardano has reached a critical milestone in its blockchain development, with the first fixed rate lending and borrowing protocol, Kulfi finance launched on the Cardano blockchain.
Kulfi Finance a decentralized lending and borrowing protocol announced its platform launch on the Cardano blockchain.
Upon launch, Kulfi V1 will facilitate a fixed rate/term lending and borrowing protocol on the Cardano.
Notably, the release introduces decentralized finance (DeFi) primitives to the network, marking a significant milestone in the development of Cardano blockchain technology, allowing users to lend and borrow cryptocurrencies with certainty.
Kulfi Token and DAO
The primary use case of the Kulfi Finance token (KLS) is as a governing mechanism of the Kulfi platform. Following the initial launch, the Kulfi Finance team “will provide analysis and parameter recommendations”.
However, as the project develops and gains adoption, the team will take a step back. In turn, this will allow KLS token holders to suggest, vote upon, and implement changes within the Kulfi ecosystem.
Each single KLS token is representative of one vote. The more KLS tokens one holds, the more influence one can have in a vote.
Holders of KLS holders will be whitelisted for Kulfi NFT Pre sale and will take part in crucial referendums on the Kulfi protocol.
There is quite an extensive list of Kulfi Finance token (KLS) holder governance responsibilities.
Highlighted below are Kulfi Token utilities.
- Proposing and evaluating upgrades to the protocol
- Access Grant for Kulfi Borrowers
- Onboarding new collateral types
- Setting liquidity fees
- Activating new maturities for lending and borrowing different assets
- Transaction fees within the Kulfi Ecosystem can be paid using KLS tokens
- KLS holders earn a percentage of the fee paid within the Kulfi Ecosystem
- Loan repayment can be done with KLS token
How Kulfi Protocol Works
Borrower: Users can mortgage their collateral in exchange for a negative wToken. The borrower can exchange negative wToken to receive stablecoins and is obliged to pay back at maturity ( Capital + Interest rate)
Lender: Users can exchange their crypto assets for a positive wToken. When wTokens matures, the lender can redeem positive wToken for its face value (Capital + Interest yield).
Liquidity Provider: Liquidity providers have the same responsibilities as DEX providers, maintaining pools and getting benefits from transaction fee and reward from the kulfi platform.
Kulfi Lenders and Borrowers Building Block Token (wTokens)
wTokens is a transferable token that represents a user’s ability to lend or borrow and the payment deadline. wtokens can be minted as positive wToken or negative wToken.
Owning wtokens in the portfolio can be understood as owning a certificate of liability for lending or debt repayment.
- A positive wtokens balance is an asset, which is redeemable for one currency at maturity.
- A negative wtokens balance is a debt obligation, obliging a negative wtokens holder to provide a currency at maturity.
Participate in KLS token pre-seed sale
Kulfi Token is currently on Pre Seed Round for early buyers, This is the first and limited opportunity for the public to gain exclusive early access to purchase Kulfi token at 1 ADA for 200 KLS tokens. Tokens can be purchased here.
Why Kulfi Finance matters
Having fixed interest rates provides borrowers and lenders with certainty and fixed-rate financing is crucial to the attainment of healthy financial markets.
The majority of debt in developed economies such as the US is typically issued using fixed rates of interest.
What Kulfi is attempting to do is perhaps akin to ushering in perceived stability into the decentralized finance (DEFI) space.
Learn more on Kulfi Finance:
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