DeFi lender 'Porter Finance' shuts down bond issuance platform within a month of launch
DeFi Lender
Modified Date:- Published Date:-Categories: Cryptocurrency
With recession concerns and declining crypto prices dampening demand for lending from the decentralized finance ecosystem, DeFi lender Porter Finance has announced the closure of its bond issuance platform: the Ethereum-based lender Porter's Ribbon. Decentralized Autonomous Organizations (DAOs) such as DAOs are allowed. Issuance of convertible bonds to raise funds in lieu of paying consideration to users.
However, lack of demand for fixed-income DeFi products meant that the Porter Finance bond issuance platform was only functional for a month. Porter Finance founder Jordan Meyer cited the competitive rates of traditional finance and the lack of institutional fixed-income DeFi adoption as twin forces driving low demand for bond issuance. Meyer has also stated that his company is "no longer prepared to take on the legal risk associated with the bond offering".
The most talked about topic of the last month was the DeFi sector with the DeFi Yield Protocol (DYP) rising by 107 percent in a week. At that time, the DYP was trading at $0.43. According to Coinbase, once the liquidity conditions are met, DYP will be phased out in trading pairs with five other Ethereum-based altcoins – PARSIQ, Elastos (ELA), HOPR, MATH and ALEPH, as well as Tether.
The six altcoins will be grouped under the exchange's new 'Experimental' title. At the same time, Alkemi Network, a joint CeFi and DeFi crypto lending platform, announced a partnership with hardware wallet maker Ledger. The collaboration will mean that the 1.5 million users of Ledger can earn income with their ETH, USDC or WBTC through its wallet interface. The combination of CeFi and DeFi allows users to maintain complete control over their assets .
A decentralized finance (DeFi) lender refers to a platform or protocol in the decentralized finance ecosystem that enables individuals to lend or borrow digital assets without the need for intermediaries like banks or traditional financial institutions. DeFi lenders leverage blockchain technology, usually on platforms built on Ethereum or other blockchain networks, to facilitate peer-to-peer lending and borrowing activities.
DeFi lenders typically operate through smart contracts, which are self-executing agreements that automatically execute transactions when predefined conditions are met. These smart contracts govern the lending and borrowing processes, including interest rates, collateral requirements, repayment terms, and liquidation procedures.
As a lender on a DeFi lending platform, you can deposit your digital assets into a liquidity pool and earn interest on your holdings. Borrowers can then utilize these assets as collateral to borrow other digital assets, such as stablecoins or other cryptocurrencies. The interest rates for borrowing and lending are determined by the platform's algorithm, which takes into account supply and demand dynamics.
One of the significant advantages of DeFi lending is the ability to earn relatively higher interest rates compared to traditional banking products. However, it's important to note that DeFi lending also carries certain risks, including smart contract vulnerabilities, market volatility, and potential loss of funds in the event of a hack or exploit.
Popular DeFi lending platforms include Compound, Aave, MakerDAO, and dYdX, among others. These platforms have gained significant traction in the cryptocurrency space, providing users with the opportunity to lend, borrow, and earn passive income through various lending and liquidity provision strategies.
The DeFi start up and crypto lending platform, Porter Finance, has shut down its bond issuance platform within a month of its launch. Created by Anthony Pompliano, the platform was designed to offer fractional lending to retail investors who use cryptocurrency as collateral.