The ApeSwap x Ola lending service will be native on BSC, filling a gap in the lending market and rounding out our complete Jungle DeFi ecosystem.
Ola will also be one of the FIRST projects going for our premier “Powered By ApeSwap” tag and recognition. 🏅 If you don’t recall what PbA is, check it out here. 👀
What is a Lending Service?
For any apes that are a bit newer to DeFi, lending protocols might be a bit scary! No worries, your main ape DK has you covered, and can walk you through everything you need to know. 😎
Crypto lending protocols started gaining traction last DeFi summer. Compound pioneered this movement, creating a platform for users to supply assets and earn interest from other users that borrow those supplied assets. To borrow an asset from the supplied assets, users must also supply collateral.
Additionally, the entire ecosystem of the protocol is “overcollateralized”, meaning you can never borrow more than what you supplied as collateral, with a large margin depending on what assets you locked up. From there, the network runs efficiently to facilitate borrowing (between users and the protocol) and liquidations (in the event a user becomes undercollateralized).
⚠️ Warning: If you borrow funds against your supplied assets, you could be liquidated if you do not manage your loan correctly!
There are two major ratios you need to be mindful of when borrowing assets. The first is a collateralization factor, the second is a liquidation factor. These are also referred to as “ratios.”
These ratios ALWAYS have the same calculation: (market value of borrowed assets) / (market value of supplied assets). Or simply put, (borrowed) / (supplied).
Collateralization factor: This is the maximum amount you can borrow against your supplied assets. It’s always represented as a percentage and equates to the dollar amount you can borrow.
Example: You supply $100 to the lending protocol. That asset has a collateral factor of 75%. You could borrow up to $75 of any other asset in the ecosystem.
Liquidation factor: The point at which your loan is eligible for someone in the ecosystem to liquidate. This means another user pays back part of your loan for you, you keep the borrowed assets, but you forfeit part of your supplied assets with a penalty.
Example: The same asset in the above example has a liquidation factor of 90%. If the value of the asset you borrowed appreciates, OR the value of your supplied assed depreciates, and that ratio goes above 90%, you can now be liquidated, risking losing your supplied assets.
So, be mindful of your leverage when borrowing assets!
How Will ApeSwap x Ola Work?
Ola is lending-as-a-service provider. Essentially, they specialize in lending networks and use their robust experience in the space to partner with other projects to provide lending services.
With that, ApeSwap will be rolling out a beta lending network with Ola on BSC on November 22nd! 🎊
This launch will be a soft launch of the network, with the purpose of gathering user feedback and testing $BANANA incentives in the network.
What will the Beta launch include?
First and foremost, the DEX engineer has done a ton of analysis on lending markets and protocols, and we believe this is the best initial configuration!
The assets available for borrowing and lending at beta launch are: $BTC, $ETH, $BNB, $BANANA, $BUSD, $USDC, $USDT & $CAKE.
These markets will also be incentivized by $BANANA to help us kickstart the protocol. ApeSwap will be using a special 2x farm to incentivize the above assets. We are performing a number of controlled variable tests on how we incentivize supplying and borrowing assets to gather ample data on how to best optimize the network. From there, we will use that data to share with the community and decide on more permanent incentives via governance! 🤓
Over the course of the 30-day beta launch, we will distribute ~$120,000 worth of $BANANA incentives.
ApeSwap is a Decentralized Exchange – Automated Market Maker, Yield Farming, and Staking platform on Binance Smart Chain (forked from PancakeSwap).