DeFi protocols and products have evolved over the incumbent ethereum blockchain and are ready for
expansion. While the inherent problems of the ethereum network are a great barrier to adoption and scalability, there’s a dire need to instill sophistication in the existing digital assets markets to elevate it
to a level at par with traditional markets.
Presently, most digital assets are mispriced and carry high volatility over a longer time frame. Hence,
holding digital assets with depleting principal value is demotivating. Therefore, users seek new incentives and frameworks to offset the losses and cope up with higher transaction costs and complexity.
What is Easyfi?
EasyFi is a universal layer 2 lending protocol built for DeFi focused on scalability, composability, and adoption. It has been designed as an open network infrastructure to run on public networks to facilitate an end to end lending & borrowing of digital assets and related financial products.
Problems & Motivation
- High cost & slow speed of transactions: High gas fees or transaction costs are a huge barrier to mass adoption and scalability.
- High collateralization ratio: While it adds to the cost of a loan, it also presents a great barrier to market expansion. Lately, new mechanisms like credit delegation, flash loans have tried to solve the problem but they are still evolving. Under collateralized and uncollateralized lending is critical for mass adoption.
- Lack of Smart financial products: traditional financial markets offer many choices and a wide range of products to choose from. Although, these are more easily accessible by institutions than retail users.
- Absence of credibility benchmarks: Identity mapping to the borrowers and their track record is still disconnected from borrowing transactions, collateral-free or low collateralized loans are a distant dream. A higher collateralization ratio is also linked to a lack of trust in a multi-party agreement. DeFi lacks such a mechanism so as to measure and benchmark the creditworthiness of a user in a scientific way. Interest efficiencies and higher costs of operations only add to the list of problems.
Solution
Porting necessary infrastructure to Layer 2 Blockchain network: EasyFi Network protocol is designed as a layer-2 agnostic solution to provide an agile exchange of assets across numerous layer 2 networks in a
plug & play mode and switching in between on-chain off-chain storage as and when necessary.
2.Existing Layer 2 solutions
Layer 2 scaling techniques move transactions off-chains and bundle them into proofs that are submitted back to the main chain. Layer 2 solutions provide better speed and low cost of transactions. These optimized networks are ethereum compatible and are customizable to a great extent. Therefore, offering the necessary flexibility to operate in a niche while constantly being connected to the main ethereum network too.
There are numerous layer 2 solutions that solve the problem of scalability and high transaction cost but needs refinement and deployment. EasyFi Network protocol is designed as a layer-2 agnostic solution to provide an agile exchange of assets across numerous layer 2 networks in a plug and play mode and switching in between on-chain off-chain storage as and when necessary.
Layer 2 scaling solutions are categorized into
(a) State channels
(b) SidechainsUndercolletralization & Borrower’s evaluation: EasyFi created an identity layer protocol called TrustScore that helps solve the dilemma. Using TrustScore users can whitelist an ERC20 address and Trustscore’s proprietary algorithms create metrics that help establish borrowers (read user’s) creditworthiness over a period of time. Trustscore scans user’s activity on various lending platforms and protocols to assess credit behavior only through that whitelisted ERC20 address. Easyfi intends to solve the problem of over-collateralization and identity layer in the decentralized finance ecosystem.
Plasma is the best available Layer 2 solution because of inherent properties while ORs & Zk Rollups are a great improvement in the direction.Smart Products: Easyfi has plans to introduce insurance in DeFi through credit default swaps as the first in a series of financial derivative instruments.
Unique Selling Proposition
EasyFi aims at bridging the gap among borrowers and sellers while addressing the
technological limitations of the existing network.
Token
Easy is the native token of EasyFi Network.
Uses
The token would be used for
Staking rewards: $EASY token will enable various projects to launch their lending and borrowing
markets on the EasyFi network hence will enable them to reward the users to stake $EASY tokens for
earning rewards in form of tokens of the respective markets and interact with corresponding markets on
the protocol.
Protocol Incentivization: Will enable users to earn rewards from time to time and provide them with
voting rights in the upkeep of the protocol and continuous development.
Governance: $EASY token will enable users to be able to play part in the protocol’s governance as EasyFi is going to become a DAO and enable the community to control various governance decisions
with respect to running the protocol.
Cross market interaction: EasyFi is the first protocol in the DeFi space to enable dual token farming, hence enabling various markets being launched on EASYFI to be able to give incentives to EASYFi users to interact with those respective markets.
Conclusion
The network design is ethereum compatible and blockchain agnostic allowing instant settlement of
assets over different blockchain networks while retaining custody with the asset owner’s network. The
cross-chain framework allows lending and borrowing across a spectrum of global markets including private platforms and permissionless public networks. The network is secured by proof of stake mechanism, governed through participating voters to achieve consensus among network participants.
EasyFi technology can be transformational for the lending ecosystem while retaining higher
efficiency, lower transaction costs, lower dependency and greater transparency.