Decentralized finance, or DeFi as it’s known, has opened up enormous possibilities for significant investor returns. Eliminating the need for middlemen in financial transactions, DeFi protocols offer users an opportunity to borrow and lend assets conveniently, without being encumbered with unnecessary paperwork or costs.
A billion-dollar market as pointed out by CoinGecko, the decentralized finance space like every frontier in technology is offering developers opportunities to create hundreds of products to solve the issues facing the industry. Up until very recently, users seeking to borrow assets from DeFi protocols have only been presented with an option to sell off their crypto holdings. This disrupts their saving process as well forcing them back into traditional financial institutions and subject to inflation.
Another significant issue, however, is with the blockchain on which most of these new protocols are built — Ethereum. Albeit the premier dApp network, Ethereum, which is the second most valuable cryptocurrency, is presently inefficient and incapable of processing fast transactions at zero or little cost. This obviously presents a huge barrier-to-entry for investors seeking to get in on the DeFi trend.
In an attempt to resolve these concerns, several protocols have been designed and launched. However, most of them have failed to live up to the solutions that they are claiming to offer, whilst others are still at their embryonic stage, awaiting launch. Therefore it is extremely exciting that a newly launched project MELD, according to its white paper, has the potential to be the next big DeFi project and what we’ve all been waiting for.
The MELD Protocol
Referred to as the first non-custodial decentralized finance and banking protocol, or the ‘banking stack on Cardano’, the MELD Protocol enables users to lend and borrow crypto and fiat assets seamlessly. As with all DeFi projects, this non-custodial banking platform will also allow users to stake MELD tokens; its native token to earn protocol revenues and provide insurance to borrowers.
With economists and experts in the United States predicting imminent inflation as reported by Forbes, MELD, according to its team, provides investors an alluring opportunity to hedge funds. Rather than letting household expenses erode their crypto savings, MELD is offering them an opportunity to leverage their crypto positions to borrow fiat, whilst still maintaining their crypto position, thereby protecting their savings, and avoiding a capital gains tax event because they’re not relinquishing their crypto assets, but borrowing against it instead.
Integrating fiat currencies into the protocol, MELD will enable users to easily borrow cash against their collateralized crypto holdings at very competitive rates. MELD will also offer what they call a "Genius Loan," which will offer negative interest rates on these loans! These types of loans are only possible in DeFi as it allows capital that is locked up in assets to be utilized through the concept of "money legos," allowing various parts of the blockchain ecosystem to be utilized with little to no cost.
As Ethereum fees continue to dramatically increase, the cost of using DeFi protocols built on its network will also rise exponentially. It’s reported that DeFi protocols on Ethereum charge over $50 as the fees of the premier dApp network soars. However, MELD is being built on the Cardano blockchain, one of the fastest and most advanced networks in the crypto space. Leveraging Cardano’s ultra-fast transaction processing speed and ultra-low costs, MELD will deliver unparalleled DeFi services, offering so much more value to the users rather than miners.
MELD has created an innovative way to engage with the Cardano community that offers more security to investors while supporting and contributing to the Cardano ecosystem, called an Initial Stake Pool Offering (ISPO). Users can delegate ADA to the MELD stake pools from now until December 8 and earn MELD.
Within 24-hours of the MELD ISPO [Initial Staking Pool Offering] launching on July 1, over $90 USD million worth of ADA filled up nearly an entire first pool! However, at the time of writing, MELD has seen over 220 million ADA [around $280 million] delegated its ISPO, and it’s only been just over a week since their ISPO launched.
One of the enticing aspects of some DeFi protocols is that they enable investors to earn protocol revenues in return for staking to their platform. MELD is offering this too, as well as many more financial benefits, by allowing users the opportunity to become a part of the decentralized autonomous organization (DAO), earn up to 40% of protocol fees, and provide insurance to borrowers of the protocol; and this can all take place directly from within the MELDApp.
It is worthwhile noting that the team behind this project consists of renowned Haskell developers that have been direct contributors to the Cardano code base over the past 3-years. In an unprecedented and truly remarkable fashion, half of the MELD current development team are women, a rare, but very welcome, occurrence in the crypto and blockchain space. This singular act is a testament to the team’s unique setup and offering.
MELD has gotten off to an amazing start and it is so exciting to see where things will lead in regards to their protocol development, like with their beta-release of the MELDapp which users shall be able to test out very soon, as well as the positive effects that the ISPO model will have on the Cardano ecosystem. Sign up to their newsletter to stay up-to-date with the latest MELD announcements!
This article is distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice.