How MyBank, the cross-chain DeFi platform, enables high leverage, lending, and value securitization features

With the general trend of multi-chain and cross-chain DeFi, MyBank, a cross-chain DeFi lending platform, may become the most user-friendly, low-cost and high-yield Web3.0 DeFi representative.

On June 3, the referendum 114 of Kusama, the first network of Polka, was passed, which means that the Shell parallel chain on Kusama, which only has block addition and final confirmation verification, has become the Statemine parallel chain, which can be used for pass issuance and asset escrow, as the most important economic infrastructure of Polka’s cross-chain network. After Statemine is running smoothly, Kusama will officially open the slot auction, and I believe we will soon see the slot auction for the main network after all the parameters of this slot auction are collected.

In fact, there is a problem here, the market’s attention is overly focused on a single point of the auction, the auction is not all about Boca, and it does not represent the huge potential of the cross-chain ecology. That said, with the auction just around the corner, we need to take a step forward and think about what kind of ’emerging things’ will be the first to grow in the cross-chain network-based ecosystem once the auction is complete.

What to look for in the next generation of DeFi? Cross-chain + DeFi + Derivatives
Every explosive growth of the crypto pass market and blockchain-related applications is the result of the accumulation of underlying technology and infrastructure to a certain extent, whether it is the pass issuance fever in ’17 or the DeFi liquidity mining wave last year and the IDO fad earlier this year. Ether’s success in DeFi ecology and its own problems exposed in the process have made many public chain teams see opportunities, each developing independent public chain infrastructure and ecology along their own direction, constantly widening the boundaries of DeFi application ecology. But the problem is that this process is moving in a fragmented direction.

Public chains with different needs and characteristics are independent of each other, then there will be independent ledgers, wallets, applications and assets from each other. These public chains can meet the needs well in independent scenarios, but once the scenarios cross or the needs cross, users need to pay high time and capital costs, and even have to complete DeFi operations in an environment with certain risks. This cross-chain operation and cross-chain flow demand is an inevitable trend, as each public chain ecology and asset scale continues to expand, capital overflow or demand for a more open circulation space will become just a need, cross-chain bitcoin is such a natural product, then the demand for cross-border circulation of funds is accompanied by the problem of solving the high threshold, high cost and high risk of cross-chain operation.

Today’s cross-chain networks, led by Boka and Kusama, provide the necessary prerequisites for such cross-chain asset circulation and cross-chain DeFi operations. This means that users can perform cross-chain lending, trading, liquidity mining and various revenue operations within one platform based on a decentralized approach. Users’ crypto assets can flow through the cross-chain network, in a larger market, and get more efficient use of funds.

It can be said that the DeFi platform in this direction is the prototype of the next generation DeFi.

So back to the development of DeFi itself, although DeFi has achieved multi-level breakthroughs after carrying many big tests, the core points are still basic spot applications, and where the next growth point is has been discussed for a long time. In this regard, we refer to the experience of traditional financial development, the volume of derivatives is 40 to 60 times that of spot, while in the crypto market, the market value of derivatives transactions is less than half of the volume of the entire digital asset market. In contrast, the development of derivatives still has huge room for imagination. The more the crypto asset and DeFi fires burn, the stronger the demand for derivatives will be, and the speed of their market penetration and transmission will continue to accelerate, thus stimulating the emergence of new market species to fill the gap and demand in the existing market.

But the difficulty to achieve this is high, even in the same chain, many DeFi functions are scattered and independent. For example, if a user wants to add a bar to make a long or a certain type of asset, it first needs to lend a certain amount of assets in the DeFi lending protocol, and then manually switch to a decentralized exchange to open a position again. The user product interacts with multiple agreements to control the collateralization rate, in addition to the operational complexity of the position is also very difficult to manage, while in this over-collateralized lending model, whether long or short, the leverage multiplier can not be more than double.

We can connect all the above-mentioned symptoms and sort out a clearer route to the next generation of DeFi applications.

MyBank: the first cross-chain DeFi lending platform with high leverage in the polka ecology
Then, as the cross-chain network infrastructure is gradually improved and DeFi is an important trigger for each public chain ecology to start, the ecology needs an application that collects cross-chain, DeFi, and derivatives functions. So in 2021, a new species of cross-chain DeFi from the UK called MyBank was included in the Web3 Grants program as an officially supported project.

In short, MyBank is a cross-chain DeFi platform based on Polkadot deployment, using Substrate’s Runtime and Bridge to achieve interoperability between different public chains via XCMP protocol. On one hand, based on the advantages of cross-chain network, MyBank aggregates diverse crypto assets and supports users to freely flow assets across multiple chains in a more secure and decentralized manner without complicated and costly operational processes. On the other hand, MyBank fills many gaps in the cross-chain DeFi business. For example, high leverage lending, high leverage transaction exchange, unsecured lending, credit lending, etc. on cross-chain basis.

MyBank’s core business is divided into three main blocks, namely, lending BWS, trading MySwap and value securitization protocol CLF, which basically cover the most fundamental needs of DeFi at present. All actions can be completed on MyBank through smart contracts in a one-stop manner, even across multiple scenarios such as liquidity mining, lending, and trading, which is an unprecedented innovation within cross-chain DeFi.

High leverage operation, DeFi closed-loop system
Then with a mature foundational environment in the cross-chain network, a new financial system is needed for more efficient capital allocation. In the past, we may have focused on a single product for DeFi, but the current trend is that the intersection of DeFi products and businesses is becoming more frequent and the trend of systematization is becoming clearer.

Then this closed-loop system can be seen in MyBank. First of all, the bottom advantage of MyBank is the rich and diversified crypto assets brought by the cross-chain network, and then the three core businesses are important user entrances and form a cycle of asset liquidity. MySwap will allow users to trade with more than 1x leverage, allowing them to go short and long easily and quickly, thus exponentially increasing the efficiency of asset utilization in the financial markets, and further increasing the utilization of the BWS pool. Creators are able to issue their own Token/NFT in the CLF to enhance their connection with their fans and obtain start-up capital. Fans can subscribe to the Token/NFT issued by the creator, and the Token/NFT can be traded and auctioned in MySwap. What is the basic logic and positioning of each product business in the closed loop of MyBank?

How MyBank, the cross-chain DeFi platform, enables high leverage, lending, and value securitization features

Lending BWS: A package lending business with high leverage at its core
Leveraged Lending
MyBank is the first cross-chain DeFi platform in the PoC ecosystem to support highly leveraged lending operations. Users initiate leveraged lending through the transaction pool, at which time the lending funds will be locked and the operation of liquidity provision and even leveraged transactions will be completed automatically through smart contracts. As a result, the pledge ratio and clearing ratio can be greater than 1, and traders are allowed to lend more than the value of the collateral. The margin trading as an entry point makes trading a better user experience, while the lending pool will be more efficient and the liquidity provider can get better returns.

Social Secured Lending
Based on collateralized lending, MyBank will unlock the liquidity of depositors’ assets to leverage their social value and provide zero collateral secured lending services. Depositors can use their deposit credentials to guarantee loans for their friends in their social networks, who can then make zero-collateral loans on the platform based on the guarantee. Each user can choose to maintain a social network circle of their own, and the buddy relationship needs to be confirmed by both parties. When a user has a loan need and wants to choose a zero collateral guaranteed loan, he can send the loan event to his friend’s inbox, and the friend can choose to respond to the event to become the user’s guarantor, and the system will issue the loan to his friend after the guarantee is successful, and the deposit certificate will be locked by the system but will not affect the guarantor’s income as a liquidity provider. The introduction of the guarantee mechanism will allow idle deposits to be used to increase the pledge rate and at the same time will ease the liquidation of the system in highly volatile market conditions. The guarantee mechanism is built on top of a social network to achieve risk-free constraints, with lenders and guarantors having real social connections under the chain.

Unsecured credit lending
Users’ deposit records, loan records, guarantee records, transaction records, and social networks will be stored on the chain, and the anonymous credit data accumulated by users combined with off-chain governance gives the possibility to develop credit lending business. MyBank has set aside 5% of token to encourage users to participate in collective governance and off-chain resource matching. When the ecology develops to a certain scale and the governance organization is perfected, it will start to open up gradually, and in the first stage, it will be open to the institutions and enterprises approved by the community.

How MyBank, the cross-chain DeFi platform, enables high leverage, lending, and value securitization features

Overcollateralized Lending
Depositors can inject liquidity into the corresponding MyBank pools to obtain a certain interest return, and MyBank’s bilateral asset liquidity pools will greatly facilitate asset utilization. For over-collateralized lending, borrowers need to over-collateralize a certain amount of assets as collateral and choose a suitable pledge rate to lend the required assets, and when the pledge rate is less than a certain threshold, the system will trigger liquidation to auction the collateral. Instead of peer-to-peer interaction between users, each loan will interact with the pool of funds. As opposed to a single-chain lending market, borrowers can provide multiple crypto assets as collateral and the system will automatically convert across chains.

MyBank provides users with different ladder solutions around high leverage and unsecured lending business, meeting diverse DeFi lending needs.

Trading MySwap: decentralized high leverage cross-chain trading hub
High Leverage Trading
Decentralized, high-leverage transactions are the most promising direction for DeFi today. The problem is that most lending agreements are currently independent of DeX, and if a leveraged transaction is needed, the user must first pledge a portion of their funds from the lending platform before they can obtain a loan to trade in DeX. The deposit certificates obtained by the user in the lending platform itself have real value, but this liquidity is not released, resulting in lower asset utilization in the lending program and ultimately lower deposit rates in the lending platform. After manually pledging the loan in the lending platform and then returning to DeX to execute the transaction, the whole experience is very cumbersome and users cannot conveniently control the transaction position, which indirectly increases the transaction risk and operation cost. Moreover, the current lending agreement is limited by the over-collateralization mechanism, and users’ capital utilization cannot reach more than double.

MyBank integrates the lending pool with the trading pool, and the assets exchanged by leveraged trading will be locked in the network, so the assets that can be lent from the lending pool are allowed to exceed the value of the collateral assets, and the leverage can be more than double, and the liquidation of leveraged trading will be independent of the liquidation of over-collateralized lending, so the leverage can be unlimited in theory, but considering that the liquidation has a certain delay. Therefore, the maximum leverage will be different for different funds depending on their risk system. To make a leveraged transaction, users only need to do it once on the front end and the above steps will be done automatically in one Bloc. If a user is not optimistic about the future of XToken

If a user is not optimistic that XToken will continue to rise in the future, they can choose to borrow XToken in BWS, then sell XToken in MySwap to get stablecoin, and then use the stablecoin to redeem XToken to return the loan when the price drops. If a user is optimistic that XToken will continue to rise in the future and wants to leverage long XToken, he/she can borrow Stablecoin in BWS, then use Stablecoin to get XToken in MySwap, and then sell XToken to redeem Stablecoin to return the loan when the price rises.

How MyBank, the cross-chain DeFi platform, enables high leverage, lending, and value securitization features

Value Securitization Protocol CLF: Individual Social Value Pass-Through and NFT Issuance
Securitization
MyBank’s CLF is a value securitization protocol, similar to asset securitization, where creators can issue social tokens and NFTs backed by their potential and future revenue, which fans can buy to invest in creators to share their future revenue. tokens can be traded based on MySwap, and NFTs can be auctioned through MySwap. In addition to providing asset issuance functions, MyBank will also provide IPFS, Vote and other dApps for creators to help build a bridge between creators and fans.

When MyBank grows to a certain scale and the collective governance organization is gradually improved to connect off-chain resources and on-chain governance, outstanding creators after consideration by the community can initiate credit loans of a certain amount from the lending pool, while high-quality social tokens and NFTs meeting certain conditions will also be allowed to be used as collateral for lending.

How MyBank, the cross-chain DeFi platform, enables high leverage, lending, and value securitization features

Liquidation
MyBank proposes a more advanced clearing solution to circumvent the loopholes in the design of clearing mechanism exposed in the previous big shock market. First of all, over-collateralized lending, secured lending, bar lending, etc. all require the system to monitor the pledge rate of Position in real time. Unlike the current DeFi protocol on Ether, which relies entirely on third-party liquidators, MyBank’s liquidation monitoring mainly relies on the collector miners on ParaChain, whose Rumtime has a built-in distributed scheduling system and a priority queue. Its Rumtime has a built-in distributed scheduling system and a priority queue, where different miners are responsible for handling different positions to achieve parallel monitoring, and the cleared Task will be submitted at a higher speed.

In the specific liquidation, MyBank has three levels of underwriting, firstly, the margin / collateral assets will be auctioned through the built-in transaction pool with a default slippage, and if the execution in the built-in transaction pool fails, other DeX auctions in the ecology will be attempted. On top of these two, MyBank will expose third-party APIs and provide front-end pages that allow third-party liquidators to participate in asset auctions, with the liquidators receiving a percentage of the liquidation penalty incentive for successful auctions.

DeFi is resilient beyond all imagination, while DeFi it continues to mutate and grow forward. The environment built by cross-chain technologies such as polka now provides a new catalyst for this innovation and mutation. MyBank is an attempt to integrate the underlying technologies that are not perceived by users at the value level into an application platform that can bring real value to users. Under the general trend of multi-chain and cross-chain DeFi, MyBank may become the most user-friendly, low-cost and high-yield Web3.0 DeFi representative.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/how-mybank-the-cross-chain-defi-platform-enables-high-leverage-lending-and-value-securitization-features/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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