What is Equilibrium?
Recently we were pleased to announce our collaboration with Equilibrium, a Polkadot-based interoperable money market. Ryabina will enter Equilibrium’s existing stable of network validators and set up our Substrate Telegram alert bot to help Equilibrium community track noteworthy network events.
Ryabina chose Equilibrium as a partner for several reasons. With the current DeFi hype, dozens of new financial products enter the market every day, while Equilibrium proved itself as a strong DeFi project built by fintech veterans. Before Polkadot, Equilibrium built an EOS-based network with its EOSDT stablecoin, offering lending and borrowing service with EOS/BTC/ETH collateral and a staking pool for EOSDT and NUT.
Bringing their experience and ideas to the Polkadot ecosystem, Equilibrium will help its community follow them offering the Token Swap (NUT to EQ) before the PLO. We value the fact of a large number of developers involved in network building, as well as trustworthy Equilibrium partners like Binance, Huibi Global, Bancor, and Coinmarketcap.
Our global strategy is to remain an active, trusted provider in the blockchain field for a long time. We have to choose partners wisely, and Equilibrium made for a great choice.
We’ve created a short overview of the Equilibrium network and invite you to familiarize yourselves with it.
Equilibrium offers financial services users the ability to lend and borrow various crypto assets as well as protect system debt and earn fees in return. The project received a Web3 Foundation grant of $27,000 to develop its DeFi pallet and provide tools that let other projects migrate to the Polkadot platform.
The main actors in Equilibrium system are:
● Lenders can stake crypto assets and via lend assets in Equilibrium and earn interest via pooled lending. In Equilibrium lenders transfer the liquidation risk to the bailsmen: in case of borrowers’ default, lenders get their assets back from the bailsman pool, while bailsman get liquidated collateral in return.
● Bailsmen secure loans in the system by providing liquidity in advance to cover for borrower liquidations. with their assets and earning additional premiums. When borrowers default on their loans, their collateral and debt get distributed among bailsmen on a pro-rata basis.
● Borrowers can borrow crypto and generate synthetic assets or decentralized stablecoins, all with an automatically defined APR.
● Traders can trade cross-chain, the platform allows for leveraged trades on margin up to 100%.
Equilibrium differs from other DeFi services of its kind with its approaches to on-chain pricing (interest rate calculation) and risk calculations (determination of overall system health):
- No arbitrary governance-set interest rates. They are determined by a borrower’s portfolio, borrower debt, overall system liquidity, and the market’s risks and dynamics.
- No arbitrarily set LTV requirements. The system makes sure every position remains solvent at a 100% collateralization ratio.
- No arbitrarily set liquidation penalties, and no hidden fees when borrowers default on their loan.
- NPoS payments
- Liquidity farming