By: A poplar tree
Amara, a multi-chain asset lending service provider built on Acala, differentiates itself by offering “long-tail assets” lending services outside of mainstream assets, while trying to bring more assets into the boca ecosystem with the help of cross-chain protocols.
On June 15, the first parallel chain slot auction of Kusama, the pioneer network of Poca, was officially launched, which means that the Poca ecosystem has also taken the first real step: “parallel chain is the beginning of value capture of Poca, and the biggest value capture may come from the incremental market of Poca DeFi ecosystem”.
As we all know, in the public chain system, especially the public chain DeFi ecosystem, the lending protocol plays an important role as the underlying cornerstone, providing the support of capital volume for the growth and development of many DeFi derivative tracks including DEX, interest rate agreements, options, etc., thus becoming an indispensable leading component demand, just like AAVE, Compound on Ether and Venus on BSC, etc.
What is Amara?
As a multi-chain asset lending service provider built on Acala, Amara focuses on the incremental market of the PoC DeFi ecosystem, which includes lending products for “mainstream and long-tail assets”, asset cross-chain protocols such as Mara-link and NFT, lossless lottery, variable interest rate, and a series of financial derivatives.
In other words, Amara’s short-term goal is to become the most popular lending marketplace in the PoC ecosystem and to bring as many assets as possible into the PoC ecosystem.
Lending products that encompass “mainstream and long-tail assets
Amara lending products include both mainstream and long-tail assets. As we all know, DeFi lending leaders such as AAVE, Compound and MarkerDAO are cautious about the coins they support for risk control reasons, and choose mainstream assets that have been studied over time and in the market.
However, compared to the stable performance of mainstream assets such as BTC and ETH, the market of high-quality second-tier blue-chip assets is really sought after by investors to some extent, and users tend to allocate a certain percentage of their positions in smaller coins.
Asset cross-chain agreement Mara-link
The size of the lending market has a strong positive correlation with the size of the assets on the chain. Therefore, in addition to the assets within the PoC ecosystem, Amara aims to bring more high-quality assets into the PoC ecosystem through Mara-link, a cross-chain asset protocol.
Other derivatives services
With the lending market as the starting point, the subsequent construction of derivative financial services is possible. Amara’s subsequent plan includes NFT, lossless lottery, prediction market and other segments.
In a nutshell, Amara is trying to introduce more assets into the polka ecology by introducing lending services for “long-tail assets” other than mainstream assets, as well as cross-chain protocols, thus opening up the imagination of the cross-chain DeFi ecology.
Amara’s token is MARA, a platform equity and governance token with a total of 150 million tokens. In April, Amara completed a seed round of funding from Digital Renaissance Foundation, DFG, Chain Capital, PreAngel, Dragon Roark, Waterdrip Capital, BTX Capital The investment round was funded by Digital Renaissance Foundation, DFG, Chain Capital, PreAngel, Dragon Roark, Waterdrip Capital, BTX Capital, AngelONE and dozens of other institutions.
The original allocation of MARA tokens is as follows.
4% Seed round
11% IDO and strategic private placement rounds, of which IDO’s will account for the vast majority.
55% Mining rewards, with lending mining rewards accounting for a portion of this.
The main scenarios for the use of MARA are
Community governance: eligible MARA holders can put forward constructive motions on Amara’s development, all MARA holders enjoy Amara’s corresponding voting rights, and Amara sets up a dynamic incentive mechanism to improve users’ governance efficiency.
Debt Pooling Line: Long-tail assets lending area is set up with a special deposit and lending line online, and more lending lines can be obtained by pledging MARA.
Insurance Staking: MARA deposited in Insurance Staking is used for risk margin in specific emergency situations.
Asset Gain: Users mining introduce “popular mining acceleration pool”, the more MARA amount you hold, the more you can achieve mining gain.
Risk Margin: Part of the MARA from Amara platform will be used to purchase high-quality stable assets as the platform risk margin, such as BTC/DOT/ETH/KSM/ACA, etc.. The platform can use these assets as collateral to borrow assets from other lending platforms under the premise of asset safety to ensure the safety of users’ assets.
Asset withdrawal: When withdrawing user assets, the recovery and destruction of vToken requires a certain amount of MARA as the destruction cost.
Product and Team
The Amara lending module has been deployed on the Acala Mandala TC6 test network, and the first batch of deposits and lending of USDT, ACA, BTC, DOT and other assets have been opened, and lending mining has been opened on the test network, and users can get MARA rewards by depositing and lending operations.
These functional modules are currently being tested internally to further improve the stability of the product. The Amara lending module will go live once the main Acala website is live and stable.
In addition to the Amara lending module, technical research for another key infrastructure, Mara-link, was initially completed in early June, and Research will be officially launched in late June.
Amara CTO Simon has a dual academic background in computer science and finance, over 15 years of development and project management experience, and has been responsible for several popular projects and has extensive experience in DeFi development.
Other core development members of the team, some of whom were early contributors to Poca’s code, have successfully applied for Web3 Foundation Grants and have been focused on the Poca ecosystem. The operator services team comes from projects and institutions such as Penta, Nebulas, and NewYork University.
From the development of Ethernet DeFi ecology over the past year, from COMP to LINK, then from UNI to MATIC, the speed of the rise of second-tier DeFi “blue chips” is really eye-catching to the market.
This also verifies the rationality of Amara’s “long tail strategy”: in addition to mainstream assets, it is committed to exploring and satisfying the lending needs of long tail assets, while using this as a grip to accumulate capital volume, and then deriving a new cross-chain DeFi ecosystem based on polka, which undoubtedly has enough room for imagination.
However, in the “Venus Large Bad Debt” incident in May, the giant whale targeted the loophole of XVS as collateral assets and borrowed and transferred hundreds of millions of dollars worth of BTC and ETH by raising the price, which undoubtedly exposed the fatal weakness of long-tail assets in the lending market as illiquid and easy to be manipulated.
From this perspective, if Amara’s vision of lending long-tail assets and the new cross-chain DeFi ecosystem behind it is to be realized, the first challenge is how to balance the lending parameters with the need for risk control, otherwise it will be easy to fall into the dilemma of repeatedly swinging between the two extremes of the “Matthew effect” and “bad debt settlement”.
For Amara, this is undoubtedly a test, just like a tightrope hanging between two cliffs, a safe walk across is a new horizon, but only if there is enough strength to grasp the balance.
The Amara lending module is not yet officially launched, and more mechanism design has not yet been disclosed, so we will see.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/three-minutes-with-amara-a-cross-chain-asset-based-lending-marketplace-on-acala/
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