The decentralized finance (DeFi) ecosystem has been gaining traction in recent years, but it still faces several challenges that hinder its mainstream adoption. One of the primary obstacles is the high collateral demands required for users to participate in DeFi protocols. This can be a significant barrier for individuals with limited capital, as they may not have sufficient funds to meet these requirements.
The Need for Inclusive DeFi Solutions
To address this issue, innovative solutions like DeFi leasing have been emerging. By allowing users to access assets with a fraction of their cost upfront, DeFi leasing provides a blueprint for making DeFi more inclusive. This model enables individuals with limited capital to participate in DeFi, as they can access assets and financial opportunities without the need for large upfront investments.
Empowering Flexible Lending Solutions
Nolus, a Web3 financial suite, is at the forefront of this innovation. Its flagship solution, Smart Leverage, takes inspiration from traditional leasing models that seek to merge user flexibility with functionality. By allowing users to access assets without paying the full upfront cost, leasing enhances accessibility while maintaining control over the asset.
How DeFi Lease Works
Smart Leverage utilizes this principle in DeFi, enabling users to amplify their positions through partially collateralized loans. This offers enhanced exposure and predictable terms for users. The down payment and loan are locked in a smart contract, acting as collateral, while fixed borrower terms provide predictability and stability.
Strategies for User Flexibility
Users can take advantage of Smart Leverage to pursue various strategies. For example, by depositing 1,000 USDC, they can borrow an additional 1,000 USDC to acquire double the amount of a cryptocurrency like Cosmos (ATOM), with the combined holdings acting as collateral. Alternatively, they can leverage short positions to benefit from price declines while maintaining a fixed loan obligation.
Mitigating Risks through Partial Liquidations
Instead of exposing users to the full impact of market downturns, Nolus employs partial liquidations — selling only a portion of collateral to maintain position stability. This reduces financial strain and provides users with opportunities to recover.
Growth and Token Buyback
Nolus’ growing adoption is reflected in its milestones. In a period of two months, Nolus’total value locked (TVL)has surged fivefold to $5 million, while transaction volumes have increased sixfold, reaching a cumulative total of $90 million.
Strategic Tokenomics
Nolus’ strategic tokenomics also plays a key role in its ecosystem’s sustainability. A recent buyback of 4 million NLS tokens, the fundamental value unit within the network, has offset blockchain inflation by a factor of two while reducing external incentives.
Adaptive Strategies for Volatile Markets
Through adaptive strategies like partial liquidations and collateral optimization, Nolus demonstrates adaptability in volatile market conditions. For example, during a $2.3 billion marketwide liquidation event, the platform limited losses to just three partial liquidations across one asset class — 0.83% of all active positions — demonstrating its effectiveness in reducing the financial risks for users.
Looking Ahead: A Decentralized Financial System with Value, Security, and Innovation
Nolus envisions a decentralized financial system with value, security, and innovation. With consistent growth, resilience during market challenges, and user-focused solutions, Nolus demonstrates that it is on the right track to achieving this vision.
Learn More about Nolus
To stay up-to-date with the latest developments in DeFi and learn more about Nolus, visit their website or social media channels. With its innovative approach to DeFi leasing and flexible lending solutions, Nolus is poised to make a significant impact on the decentralized finance ecosystem.
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