The Lending and Borrowing Landscape on TON

Introduction to Lending and Borrowing on TON

Lending and borrowing are cornerstone activities within a blockchains DeFi ecosystem. In DeFi, these mechanisms provide liquidity, facilitate market efficiency, and enable users to leverage assets to enhance their investment potential. This dynamic helps drive innovation and growth across the DeFi landscape. By integrating lending and borrowing, DeFi platforms allow users to access capital, engage in yield-generating activities, and manage risk more effectively. As such, these processes are crucial for the maturation and advancement of the DeFi sector.

The TON blockchain has emerged as a top blockchain ecosystem, enhancing digital finance capabilities through innovative lending and borrowing protocols. This article delves into the unique contributions of leading protocols on the TON blockchain, highlighting their roles, functionalities, and the synergistic potential they bring to the DeFi space.

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EVA Protocol

Evaa Protocol is a decentralized lending and borrowing platform on the TON blockchain. This protocol enables users to engage in lending and borrowing activities without needing a centralized intermediary, thus enhancing security and trust through blockchain technology.

Evaa's integration into the TON blockchain is a strategic move to leverage Telegram's vast user base and develop a robust DeFi ecosystem. Evaa aims to simplify the financial landscape by facilitating direct peer-to-peer transactions, allowing users to lend their assets and earn returns or borrow with collateral at fair, demand-driven interest rates.

The protocol not only introduces essential DeFi functionalities like lending and borrowing to TON but also incorporates innovative features that ensure liquidity and secure transactions. For instance, if a borrower fails to maintain adequate collateral, the protocol automatically liquidates the assets to protect lenders, adding a layer of security to the investment.

Its partnerships and community engagement initiatives prove Evaa's commitment to the TON ecosystem. A noteworthy collaboration is with Existential Capital. This partnership aims to accelerate the development of next-generation DeFi solutions on TON, enhancing functionalities such as on-chain interoperability and creating a cohesive ecosystem where various dApps can interact seamlessly.

DAO Lama

DAO Lama is a DeFi lending protocol within the TON Ecosystem designed specifically for NFT collateral lending. It enables users to borrow TON by using their NFTs as collateral. This innovative functionality not only provides liquidity to NFT holders but also enhances the utility of NFTs beyond mere collectables. DAO Lama leverages TON Connect for secure user authentication, which allows seamless interactions with the platform using TON wallets.

The mechanism at the heart of DAO Lama is designed to support the fluid value exchange between tangible NFT holdings and liquid crypto. This particularly appeals to those in the digital art and collectables space, where assets can be precious and illiquid. The platform empowers users to unlock the value of their NFTs in a way that maintains their ownership and potential for value appreciation over time.

Ton Pound

Tonpound is a lending protocol that bridges The Open Network (TON) and the Ethereum blockchain. This innovative platform unlocks significant liquidity potential by allowing TON staked in nodes on The Open Network to be used as collateral on the Ethereum blockchain. This connection not only enhances the liquidity options available to TON holders but also attracts the attention of Ethereum users, drawing them towards the capabilities of The Open Network.

Tonpound's strength lies in its unique governance structure, which revolves around Governance NFTs (gNFTs). These NFTs play a crucial role in voting and distributing protocol earnings. They are created by burning the Tonpound Participation Index (TPI) token, a measure of community engagement. This token is primarily distributed through airdrops to early supporters and liquidity providers, emphasizing the platform's commitment to a fair launch and equitable distribution of tokens and governance influence.

Tonpound's integration with Ethereum offers a unique opportunity for Toncoin holders. They can maximize their earnings by collecting staking rewards from the TON network while simultaneously earning interest on their lent wrapped TON (Supply APR). This integration also allows them to leverage their positions to borrow additional assets on the Ethereum network, creating a multifaceted benefit system that underscores Tonpound's strategic advantage.

Moreover, Tonpound supports a range of ERC-20 tokens, including TON (pTON), WBTC, ETH, USDT, USDC, and DAI, with the potential to expand this list through community voting. The platform operates on a trusted model where supply and borrow markets adjust interest rates based on real-time supply and demand dynamics.

Aqua Protocol

Aqua Protocol is a decentralized lending platform on the TON blockchain, distinguishing itself through its use of Liquid Staking Tokens (LSTs). The platform's standout feature is AquaUSD, an over-collateralized stablecoin pegged 1:1 to the US Dollar, allowing users to secure loans using their cryptocurrency holdings as collateral. This is particularly beneficial for those holding LSTs, as these assets continue to generate staking returns even while deposited.

Aqua Protocol operates here: Users begin by depositing TON or LSTs as collateral. They can then mint AquaUSD against this collateral, with the protocol allowing loans up to 50% of the collateral’s value to safeguard against market volatility, maintaining a minimum collateralization ratio of 200%. AquaUSD can be used for a range of DeFi activities, such as trading for other cryptocurrencies, hedging risks, providing liquidity, buying NFTs, or other tokenized transactions, making it a versatile tool in the TON ecosystem.

When users wish to retrieve their collateral, they simply repay the borrowed AquaUSD. The collateral is then released and can be withdrawn, effectively closing the borrowing cycle.

Aqua Protocol offers several key benefits: It allows the collateral to continue earning staking rewards, enhancing capital efficiency for users. The stability of AquaUSD mitigates the typical price volatility of cryptocurrencies, which is vital for effective financial planning and risk management in DeFi. The protocol is also community-governed through the Aqua DAO, with decisions like adding or removing LSTs made via democratic voting by AQUA token holders, ensuring it meets the evolving needs of its users.

Conclusion

The TON blockchain hosts a dynamic array of lending and borrowing protocols, each contributing uniquely to the DeFi ecosystem. From Evaa Protocol's integration of peer-to-peer functionalities to DAO Lama's innovative use of NFTs as collateral and Tonpound's cross-chain capabilities to Aqua Protocol's deployment of Liquid Staking Tokens, these platforms collectively enhance the utility, security, and accessibility of DeFi. As the DeFi space on TON expands, more lending protocols and applications will be released.