Parallel Finance -diversifying your money on the blockchain
The basic idea of the project was an independent blockchain of the Polkadot network, the system of which has reached a capitalization level of more than 40 billion US dollars by now. In this sense, the Parallel project is a natural addition to fill in the gaps in the business backed by the DOT cryptocurrency, since there are no active applications that allow users who stake this coin to receive liquidity. In this vein, we care about eliminating high opportunity costs when using decentralized applications
The Parallel platform introduces an innovative financial base for DOT staking, which allows users to earn a profit boost while maintaining a liquid asset that is not subject to long periods of unlocking or locking up. This financial denomination with a staking function is called xDOT
Parallel Lending Protocol Model
In the age of digitalization, we also use a blockchain token as a security unit of the entire business model in which they are given and borrowed.
The Parallel project allows users to borrow over-collateralized loans through the protocol. To borrow an asset, users need to deposit or approve assets as collateral that exceed the outstanding amount of the borrowing, thereby locking in the borrowing. As prices vary, the user’s collateral becomes available for purchase at the market, minus a liquidation discount. At the same time, the whole system combines the provided assets of each user
@parallelfinance
This lending protocol will have a pool of DOT, xDOT and USDT stablecoin, where users can invest and receive interest with the possibility of their implementation.
Fund balances in this money market area earn interest based on the offer interest rate, which is calculated based on the current interest payable divided based on pool ownership among current users supplying assets to this market. The user community can view their balances in real time. And also, a user who owns xDOT can borrow this asset in the financial market, thus simultaneously receiving income from rates and interest
Methodology of financial profit
The basis is the interest rate model, which consists of: — Internal exchange rate; — The principle of the interest rate model; — Interest rate on the loan; — Parameters of the interest rate on the loan; — Interest rate of the offer; — Interest rate index; — Borrowing mechanism.
Summing up this information block, we take into account that Parallel is a decentralized lending protocol with a floating interest rate determined by the demand and supply of underlying assets. The staking protocol also provides turnover for asset bonding in the Polkadot ecosystem. Parallel is inherently creating competition between staking and DeFi rewards.
When the project collects a small fee for its own business profits, these fees go directly to the Treasury. The fee goes towards funding the ecosystem and enabling healthy natural business growth. Teams make spending proposals, and board members approve or disapprove them. Council members can also provide a known contribution with a small amount of native tokens
Author Evgeniy#6220 (Discord)
