Introducing dAMM Finance

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Written by

Nemonasa

A father of three beautiful daughters that love to write about anything interesting.

1 year ago

Topics: Cryptocurrency, Money, Blockchain

Introducing dAMM Finance

Hello there crypto frenz, I am here again to share a latest crypto lending platform that could give you a real yield on all your crypto assets if I can convince you to invest in their platform to become one of their lenders. The project just hit Etheruim mainnet last week September 22, and dAMM would blow all existing lending platforms on the market today.

What is dAMM

dAMM is an uncollateralized lending platform for any token with algorithmically determined interest rates. Any token with a liquidity pool on dAMM, market makers and investors can borrow on dAMM to provide liquidity and trade across all centralized and decentralized trading venues.

Token suppliers and market makers interact directly with the dAMM protocol to both supply and borrow token liquidity without exorbitant fees, strenuous onboarding procedures and bilateral deal negotiation. Liquidity pools are unique to each token asset and entirely transparent/publicly accessible via their respective blockchains.

Why choice dAMM

For years now all mainstream lending platforms only lend stable coins, and dAMM would address that constraints for the platform would put some atlcoins available to be borrowed by a lender. At the time of dAMM release they had 25 available coins listed and planned to hit a target of 200 coins in its first year of operation.

As a bonus you can access dAMM platform on all EVM-compatible chains, like Avalanche, BSC, Arbitrum, and my favorite chain the Polygon.

Another constraint on a mainstream lending platform that dAMM would try to address is risk mitigation, one that dAMM would resolve by only lending to market neutral market makers. As one of the core dAMM core member had said “For the last five years in crypto, there hasn’t been a single market maker default on a public platform or an institutional lending platform,” “The only defaults were people that were lending to directional trading firms like Three Arrows Capital.”

To protect and provide transparency to dAMM lenders that they would know the platform client is that the platform client addresses would be labeled and go through a solid know-your-customer (KYC) and know-your-business (KYB) checks. Baker also provided some details on how the platform would provide transparency and insights to it’s lender “We're going to start out publishing all the addresses of every market banker that borrows on our docs,” “You'll be able to see every single transaction they make, every single loan they take, where they're moving all of your assets. You can see in every pool exactly who your borrowers are, who your counterparty is.”

That provides lenders with insight into what strategies market makers are pursuing; whether they’re moving funds to exchanges, performing yield farming or centralized to decentralized arbitrage strategies. Users can also see how much market makers are allowed to borrow, enabling them to gauge the risk level that the dAMM Foundation and pool delegates are prepared to accept for each borrower.

Here's a future plan that the platform would provide to its lender’s to have a leverage on their asset management, the platform would provide a risk management tool that would provide how much percentage of their loans will go to undercollateralized versus overcollateralized lending. The tool would be a huge advantage to a lender that you can actually choose your risk parameter to your liking to better manage your crypto asset.

My Final Thoughts on dAMM

This newly released lending platform dAMM Finance would eventually become a trailblazer in crypto lending for it already has $1.315M in liquidity to their on-chain transparent lending platform. Volumes are expected to continue to grow substantially with the introduction of the liquidity mining incentives that would give a lender a sustainable real yield of over 10% on more than 20 available token pools.

They have put the entire Defi community abuzz even in this bearish market time where they also plan to aggressively compete against established lending platforms like AAVE and Compound, where lenders currently have to endure lower rates than US treasury bills. They aim to give lenders a community-owned platform capable of providing competitive yields and continuous innovation.