Monthly Update: December 2022
Another month has gone by, and it’s now January 2023. Time flies in DeFi!
As we prepare for a new year, here’s our monthly report to sum up December 2022
New roadmap items are still undergoing testing, rework, and auditing. These items will be released as soon as we’re happy with their behavior and security. This refers to the new interest rate model, support for additional lending (capital) assets, multi-chain support, and decentralized backend. These items have all been described in past monthly updates and a blog post dedicated to the new interest rate model.
Simultaneous with testing the above, this month we have begun working on additional features that will drastically improve the usefulness of the Fringe Finance platform. These include partial liquidations, atomic loan repayments, and leveraged long/short positions.
Introducing partial liquidations improves Fringe’s liquidation process, positively impacting borrowers’ user experience, and increasing the stability of the Fringe Finance platform in the following ways:
Borrower benefits: Under this model, borrowers are only charged the liquidator reward fees associated with the partial liquidation to bring the loan back above the minimum collateralization level. This is compared to the liquidator reward fees on a full liquidation as currently occurs. Additionally, the borrower retains the remaining open loan position they entered into and thus is still positioned according to their original intent (i.e. long exposure to the collateral asset and short exposure to the lending asset.) These benefits will make borrowers’ experience better and make for happier users.
Fringe platform benefits: Partial liquidations invite more liquidators to participate given lower secondary market liquidity requirements to dispose of collateral won in a liquidation. This makes Fringe’s liquidation process more efficient and is expected to reduce the likelihood of positions becoming insolvent, improving the Fringe platform’s stability.
Atomic loan repayments
Atomic loan repayments allow borrowers to repay a loan without needing to have the lending assets available to repay it. The PLP will automatically use the collateral asset backing the loan to repay the loan by swapping some of the collateral assets for the lending asset through a DEX. The lending assets obtained through the swap will then be used to repay some or all of the outstanding loan. This provides greater convenience for borrowers as well as paves the way for the leveraged long/short facility.
Leveraged long/short facility
Fringe’s leveraged long/short facility will allow a user to take a leveraged long/short position on a pair of assets through a single transaction. The user specifies the collateral asset (long asset), the notional exposure they wish to achieve to the long asset, and their desired health factor, which determines the degree of leverage taken. The system then uses the user’s collateral to establish the leveraged long/short position, which is essentially a regular PLP loan position.
This new facility aims to make it more convenient, gas-efficient, and informed for users to take out leveraged positions, as opposed to the time-consuming, gas-inefficient, and potentially error-prone process of undertaking this manually through multiple transactions. This saves the user from performing multiple transactions of borrowing a lending asset, swapping it for the collateral asset via a DEX, depositing it as further collateral to borrow more of the lending asset, and repeating the process multiple times. Together with our Atomic Loan Repayments enhancement, users will be able to easily close out their leveraged positions without having lending assets on hand.
Of course, “The Fringe Finance Leveraged Long/Short Facility”, as great as this might sound, will not be the official branding for this offering. We’ll be revealing the product’s name soon!
Collateral Asset Listings
In November, five new assets joined the roster of accepted collateral assets on our platform, now totaling 29! This month’s integrations were:
- Perpetual Protocol’s $PERP
- Axie Infinity’s $AXS
- Ethereum Name Service’s $ENS
- OMG Network’s $OMG
- Loopring’s $LRC
As we have repeatedly emphasized, these efforts will continue forever. We want to serve and support as many tokens as we can in order to create a platform that is both useful and unique for all DeFi users.
Partner Spaces & Calls
In December, we shared another episode of Decentralize It!, a DeFi expert talk show hosted by Fringe. This episode centered around what the next bull cycle could look like.
The talk featured Yearn Finance’s @omgcorn, Roy Sagi from Embed Protocol and André Lages from Limpid.io. Listen to it here!
Our CTO, Brian Pasfield, wrote an opinion piece as a guest post for Finance Magnates. The article explores the benefits LP tokens bring to projects that actively provide liquidity to specific pools. Give it a read for an overview of how LP tokens add value to DeFi lending ecosystems.
Explain Fringe to your Frens
We’re set on creating more materials and articles that explain our vision of DeFi for Everyone. This month, we created a beautiful infographic explaining how crypto loans on the Fringe Platform work in a light yet precise way. Don’t hesitate to give it a read:
Though the second half of 2022 has seen market turmoil in the crypto and DeFi space, Fringe Finance is carefully taking this opportunity in the market doldrums to deliver roadmap items that will solidly position Fringe Finance as a DeFi platform with a unique, valuable proposition.
We honestly can’t wait to continue delivering through 2023.
About Fringe Finance
Fringe Finance is a decentralized money market designed to unlock the capital spread in crypto assets regardless of their capitalization and supported network. With a next-generation DeFi lending & borrowing ecosystem, Fringe aims to unlock the dormant capital from traditional financial markets and all-tier cryptocurrencies.
For more information on Fringe Finance, visit our website.