Gate.io AMA with Lends

Time: May 7th, 2024, 13:00 UTC
Gate.io hosted an AMA (Ask-Me-Anything) session with Haroun,CEO of Lends in the Gate.io Exchange Community.
Official Website: https://www.lends.so/
Twitter: https://twitter.com/lends_so
Follow Lends on Twitter and Discord

Q1: Can you please introduce yourself to community members?

Hi everybody, my name is Haroun, and I am the CEO of Lends. With me, I have Ahmed, who is the CTO of Lends. Together, we co-founded Lends.

Q2: What is the core problem that Lends aims to solve in the lending market?

Lends aims to solve several core problems in the traditional lending market. Firstly, it addresses the inefficient spreads between borrowing and lending rates, where borrowers pay higher interest rates, while lenders earn lower yields. This inefficiency arises due to the middlemen involved in the lending process.

Secondly, Lends tackles the issue of limited price discovery in traditional lending pools. These pools often lack transparency, making it difficult for lenders and borrowers to determine fair market rates.

Thirdly, Lends solves the problem of shared risk in lending pools, where all lenders share the risk equally, regardless of their risk appetite or the borrower’s creditworthiness.

To address these issues, Lends utilizes order books, which allow lenders and borrowers to interact directly, without intermediaries. This market-driven approach enables more efficient pricing, better price discovery, and customizable risk exposure. Additionally, Lends offers a composable lending solution, allowing for the creation of diverse lending products tailored to specific needs.

Q3: How does Lends’ order book lending model work, and what are its advantages?

Lends’ order book lending model operates similarly to a traditional stock exchange. Borrowers place loan requests with their desired interest rate and loan amount, while lenders offer to provide loans at their preferred interest rates and amounts. These orders are then matched based on price and quantity, much like buy and sell orders in a stock market.

The key advantage of this order book model is that it allows for dynamic, real-time price discovery. As supply and demand for loans fluctuate, the interest rates (prices) adjust accordingly. This market-driven approach ensures that loan prices are always reflective of the current market conditions, providing a more efficient and transparent lending eco.
Furthermore, the order book model eliminates the need for intermediaries, as lenders and borrowers can interact directly. This direct interaction reduces spreads between borrowing and lending rates, resulting in better rates for both parties.

Another significant advantage is the ability for lenders to customize their risk exposure. Instead of lending into a pooled fund with shared risk, lenders can choose which specific loans to finance based on their desired risk-return profiles.

Overall, Lends’ order book lending model fosters capital efficiency, price transparency, and composability, addressing many of the inefficiencies present in traditional lending markets.

Q4: What is the role of the $LENDS token within the Lends eco?

The $LENDS token plays a crucial role within the Lends eco, acting as the governance token and providing economic incentives for participants. Its primary functions include:

1. Governance and Decision-Making: $LENDS token holders can participate in the governance process by voting on important decisions, such as whitelisting new assets, currencies, and oracles for the lending platform. They also have a say in approving the creation of new loan contracts and shaping the future development of the Lends protocol.
2. Feature Development and Evolution: By exercising their voting rights, $LENDS token holders can influence the direction of the project, proposing and voting on new features, upgrades, and improvements to the Lends eco.
3. Fee Rebates and Revenue Sharing: Users who stake their $LENDS tokens can earn a portion of the protocol’s revenue in the form of fee rebates or rewards. This incentivizes long-term participation and alignment with the success of the Lends platform.
4. Alignment of Incentives: The distribution of $LENDS tokens aligns the interests of stakeholders, including lenders, borrowers, and the development team, ensuring the platform’s long-term sustainability and growth.

By leveraging the $LENDS token, Lends fosters a decentralized and community-driven approach, where token holders have a vested interest in the platform’s success and can actively shape its evolution through governance mechanisms and economic incentives.

Q5: How does Lends plan to ensure a sustainable and long-term growth model?

Lends is committed to ensuring a sustainable and long-term growth model through a multi-faceted approach that aligns incentives and fosters a self-sustaining eco. The key elements of this strategy include:

1. Diversified Lending Strategies and Vaults: Lends aims to offer a diverse range of lending strategies and vaults, catering to different risk appetites and investment objectives. This diversification reduces reliance on any single lending model, mitigating risks and promoting long-term sustainability.
2. Minimized Reliance on Inflationary Token Incentives: Rather than relying heavily on inflationary token incentives, which can dilute token value over time, Lends focuses on generating sustainable returns through its lending activities and fee structure.
3. Balanced Fee Distribution: Lends imposes a 10% fee on interest received by lenders, with 70% of this fee redistributed to liquidity providers, incentivizing them to contribute capital to the platform. The remaining 30% is allocated as rewards for active participants or “stakers,” encouraging long-term commitment and alignment with the platform’s success.
4. Customizable Incentive Mechanism: Lends will introduce a mechanism allowing users to lock their $LENDS tokens, granting them the ability to incentivize and redirect additional revenue towards specific vaults or lending pools. This customization empowers users to actively shape the platform’s growth and create more attractive investment opportunities.
5. Decentralized Governance: Through the $LENDS governance token, participants can propose and vote on protocol changes, ensuring that the platform evolves in a direction that prioritizes long-term sustainability and aligns with the community’s interests.

By combining diversified lending strategies, a balanced fee structure, customizable incentives, and decentralized governance, Lends aims to create a self-sustaining eco that promotes long-term growth while minimizing reliance on unsustainable token incentives.

Q6: How many total chains are available for token swaps on the Lends Swap Platform, and what can users expect in terms of fees?

The Lends Swap Platform is designed to provide users with a seamless and cost-effective experience for token swaps across multiple blockchains. Currently, the platform supports swaps between 8 Layer-1 blockchains.

In terms of fees, Lends Swap Platform offers a compelling proposition: users can enjoy zero fees on all token swaps facilitated through the platform. This fee-free structure eliminates the common pain point of high transaction costs associated with decentralized exchanges (DEXs) and centralized exchanges (CEXs), making it more affordable for users to manage their cryptocurrency portfolios across different chains.

Furthermore, by integrating with multiple Layer-1 blockchains, the Lends Swap Platform provides users with increased liquidity and trading opportunities. Users can seamlessly swap tokens from one blockchain to another, enabling them to diversify their holdings and take advantage of the unique features and ecos offered by each supported blockchain.

With its multi-chain support and zero-fee structure, the Lends Swap Platform aims to simplify the token swap experience, reduce transaction costs, and empower users to navigate the ever-growing decentralized finance (DeFi) landscape more efficiently.