The vast majority of industry experts have predicted that, after economic struggles related to the COVID-19 pandemic, the decentralized finance (DeFi) industry will experience a bull run next year. While this year has seen many new DeFi projects succeed, time is running out for new players to make their mark on 2020.
Warp Finance is uniquely posed to become 2020’s final DeFi gem before the anticipated 2021 bull run. Warp revolutionizes the DeFi space with its creation of an entirely new use case for the liquidity provisioning (LP) tokens generated from liquidity providing– acting as collateral for stablecoin loans. The advent of liquidity mining has transformed the DeFi industry, leading to ample markets for tokens and the alleviation of the liquidity problems that blockchain has faced since its creation.
However, the only real use case for LP tokens is distributing users’ shares of the transaction fees that accumulate during the period for which they are providing liquidity – and that’s where Warp comes in.Not only do users benefit from this innovative platform’s strategy, but the overall DeFi industry can benefit as well:
Warp users are able to gain leverage on their LP tokens, since Warp allows them to restake/farm the stablecoins received from their loans while their LP token collateral is staked in Uniswap, enabling them to simultaneously earn the 0.3% rewards from Uniswap for liquidity providing. Furthermore, users of the Warp platform also benefit from the possibility of negative interest loans, since the yield earned from Uniswap could surpass the interest rate on the loans, with the surplus being paid out to the borrower.
This double-whammy approach also stimulates the overall DeFi industry; Warp lets users essentially stake “on margin”, meaning that instead of just depositing their stablecoin holdings into liquidity mining protocols and receiving back LP tokens one time, they are also able to use these LP tokens for an additional stablecoin loan, which they can again stake into liquidity mining. The result is that users can provide liquidity without having their assets entirely locked up, and instead have additional stablecoin capital to generate further liquidity.
This benefits decentralized exchanges (DEXes) such as Uniswap that users perform to provide liquidity, increasing the overall liquidity of these exchanges. This will help to prepare these DEXes for the upcoming 2021 bull run, where they will likely face increased interest in exchanging on their platforms thanks to new projects and tokens as well as increased support of existing cryptocurrencies. Having this bolstered liquidity will ensure the ready exchange of tokens listed on these DEXes.
Overall, Warp Finance is positioned to be the last impactful DeFi project of 2021, providing a multitude of benefits to its users as well as helping DEXes to prepare for the DeFi bull run expected next year.
To learn more about Warp Finance and how they provide value to their users and the overarching DeFi industry, visit their website at warp.finance.