Parallel Finance announced receiving a Web3 Grant

New Cryptocurrency, Crypto Startups, IDO, IFO

Published on: 03.07.2021

Parallel Finance is very happy to announce it has received a Web3 grant!

Parallel was actually approved for the grant in April of this year, and they’ve been heads down building ever since. They weren’t able to announce their candidacy until they cleared a series of milestones set by the Web3 foundation [1]. As of early June 30th, Parallel received word that it has passed these milestones, and can officially announce the grant to build a decentralized lending and staking platform on Polkadot [2].

What is Parallel Finance?

They’re glad you asked — Parallel is an institutional-grade lending solution building in the Polkadot ecosystem to empower regular people to earn interest on their assets with the utmost safety and security in mind. They chose to build in the Polkadot ecosystem because Polkadot (and Kusama by extension) allows for faster and cheaper transactions, shared security, interoperability, and strong upgradability. Their primary goal is to create an innovative lending system that uses the power of Polkadot to generate the greatest capital efficiency for everyone involved.

What they’ve Built So Far

They built a staking and lending interface on testnet that can be used to backtest upcoming features for the mainnet launch on Kusama, where they will deploy as soon as they win a parachain auction. This interface can be used to test a protocol known as “leverage staking,” which allows users to borrow against their staked KSM and DOT in order to earn lending yield on top of staking yield. The inspiration for this system comes from a series of seminal articles by Tarun Chitra et al, where he argues that staking and lending are in competition with each other [3]. Parallel is building a system that allows staking and lending to be in collaboration, rather than competition, which increases the overall security of the network while maxing out the user’s yield.

As a part of our approach, they’ve also built a node validator evaluation schema that uses their staking interface [4]. This schema is built to nominate the best validators for users based on the reputational history of these validators. They’ve also created educational material (tutorials and Medium articles) to allow users to interact with this new lending interface, and beta test their first version, which allows them to iterate and improve [5]. By building on Polkadot, they have been able to successfully develop these features because of its ease of interchain communication, shared security, and fully decentralized scalability.