Inverse Finance Launches Stablecoin Lending Protocol: Report

Inverse finance launches a stablecoin lending protocol as one of the strangest experiments in the DeFi system continues to push for governance and architecture development. Right after it culled its community from inactive members, we are seeing a new product as we read more in our crypto news.

Inverse Finance launches a stablecoin lending dubbed Anchor Protocol which is a money market built around DOLA, the synthetic stablecoin. Based on the “modified fork of Compound” the founder Nour Haridy compared Anchor to Synthetix which is able to issue credits in the form of the assets back by overleveraged collateral while Compound issues credit in the form of crypto-asset loans which are backed by overleveraged collateral:

 “Lending and synthetic protocols both offer the same service: credit. Anchor brings the gap between them by combining them into a unified borrowing protocol.”

@InverseFinance pic.twitter.com/5eJ6NKGvoC

— Knockerton (@knockerton) February 24, 2021

Anchor aimed to accomplish this with the unique architecture which treats DOLA as “$1 collateral that can be used to borrow other assets regardless of DOLA’s market conditions or peg.” The users deposit collateral, and then can use DOLA to take out loans in other crypto assets or yield on DOLA:

 “For over-collateralized borrowers and leveraged traders, we offer them a one stop shop where they can share their collaterals across their synthetic and token borrowing positions, allowing higher capital efficiency and higher leverage.”

Haridy said that the timing was perfect as Anchor could start generating revenue for the DAO and also getting rid of the freeloaders:

 “We needed to weed out our dead weight to reclaim some tokens for re-distribution to new active members soon. We also created an INV grants committee with the power to reward contributors and add new members to the DAO. Additionally, when free riders are removed, active members become more incentivized to contribute because they get a larger piece of the pie.”

Introducing Anchor & DOLA: Capital efficient lending, borrowing and synthetic assets (and much more)

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Brought to you by Inverse DAOhttps://t.co/pOOkp8ECsR

Summary thread below ⬇️

— Inverse.Finance (@InverseFinance) February 25, 2021

The next step for Inverse will be to get Anchor off the ground and to prepare it for a world where INV will become tradeable. Haridy commented that there’s a growing consensus in the community for tradability which means that the DAO will give up on the power to seize tokens. Haridy concluded:

 “This will significantly change the existing incentives and may reduce participation. Fortunately, there’s some work on a new alternative governance model that’s been happening internally to address this problem.”