Hackernoon logoWill Institutional Investment Keep Pouring Into Bitcoin? by@TonyToreto

Will Institutional Investment Keep Pouring Into Bitcoin?

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@TonyToretoTony Toreto

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Bitcoin is up, Bitcoin is down, Bitcoin is the new gold, Bitcoinbubble finally burst – that’s basically all we hear about crypto these days. Apparently, all the progress has been limited to the price of one asset. On the other hand, when was the last time you've heard of a decent crypto project? I mean a real one, which doesn’t promise mountains of gold, great systems doing everything, and unrealistic ETAs. Exactly, about 2 or even 3 years ago and for the crypto industry, it's almost infinity.

After the 2018 ICO boom, precisely when the market started to shrink, investors began looking for true safe havens, which at that time were stable coins. The idea was to protect the funds from increased volatility, without cashing out to fiat. Another problem was that only a few places allowed paying with crypto assets. And that´s where tech giants, including Facebook and Telegram, announced working on the development of their own coins. Unfortunately for some, and fortunately for others, neither of them was able to actually succeed. Among other things, this could be contributed to their unwillingness to fight with the regulators. Meanwhile, global central banks understood they are losing ground under their feet to the emerging technology and announced their own Central Bank Digital Currencies. The only problem is that CBDCs go completely against crypto's fundamental tenet of decentralization.

Following stablecoins came decentralized finance (DeFi) or blockchain invented toward disrupting financial intermediaries. Sounds difficult? In a few words, the idea was to get rid of middlemen from all kinds of transactions, thus make finance more open. And guess who played the most important role in its disruption? Ethereum! Its smart contracts offer the flexibility crypto projects are famous for. In this context, it shouldn’t be a surprise that most DeFi applications were built on top of the Ethereum blockchain.

Besides giving everyone access to financial services, DeFiincluded lending platforms, which connected borrowers to lenders of cryptocurrencies. In other words, you could borrow cryptocurrencies or offer your own loans. Isn’t that cool? And the best part is that “compound sets the interest rates algorithmically, so if there’s a higher demand to borrow a cryptocurrency, the interest rates will be pushed higher,” as well noted by Coindesk.

Having said all of the above, it shouldn’t be a surprise that Ethereum DeFi projects began exploding, whilst their fame and usage skyrocketed. You could either earn passive income or risk a bit more and your ROI (Return-on-investment) would be higher. The question then emerged, can there be possibly something else to add? Is there a way to make one´s life even easier? Curiously yes. That’s where comes Elon Musk with the idea of a coin-sized computer chip in the brain. Just kidding 😊In reality, a decentralized lending platform called “the FreeliquidProtocol” decided to go one step further and offered loans in USD stablecoins, adding a new unique feature — taking stablecoin liquidity pools as collateral. The idea is to make crypto lending more secure for two sides.

Like any other DeFi, it’s built on top of the Ethereumblockchain, meaning the trust and reliability is their friend. But they did introduce one more innovation, Freeliquid team has opted for two native tokens: the USD stablecoin USDFL and the governance token FL. So, what can you do with the Freeliquidapp (yes, they do have a functioning web app, which is pretty cool)? Borrow, Reward, and Save.

Another cool feature is that the USD Freeliquid (USDFL) is tradeable on decentralized exchanges. Bye-bye annoying “Big Brother”. Through the Freeliquid Borrow, you could lock your crypto assets in the form of liquidity pools as collateral to borrow USDFL stablecoins. According to the company, it is done by setting up Freeliquid Vaults, which are smart contracts that generate USDFL after users lock their collaterals in Freeliquid Borrow and issue a loan. At the moment, FreeliquidBorrow supports Uniswap pools consisting of the following stablecoins: USDT, USDC, DAI, and USDN. In my opinion, it´s a pretty good start and the best thing is that more collateral types and platforms can be added later if the community approves them through voting. Though, your vote actually counts.

Freeliquid Save, on the other hand, allows users to lock their USDFL and receive constant payments, also in USDFL, accrued to their balance. First thing first, it should be noted that there won’t be any inflation of USDFL as the funding for FreeliquidSave comes from the interest charged for the loans in FreeliquidBorrow. In other words, everything is related. It´s worth adding that the USDFL tokens can be locked and unlocked with no penalties.

Finally, FL is the governance token of the platform and it gives you the right to participate in the governance of the project through voting. And take this, during the first three months of Freeliquid, users will be rewarded for providing liquidity pools for the USDFL-FL pair.

In conclusion, Freeliquid app allows to lock liquidity tokens (LP) and receive a loan (up to 90% of the locked value) in stablecoins. Even your locked LP will continue generating revenue from liquidity fees. At the moment, no other platform offers similar services, which makes it quite unique. Also, if you want to participate in the governance of the project you would need an FL token. USDFL, its native stablecoin, is issued at a 1:1 ratio to the US dollar value of the provided LP. Finally, the Freeliquid platform is already live with the $FL reward program running. So why not to try it and lock USDFL into a savings account (Freeliquid Save) and receive a gradual yield?

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