Yamfore, how does this ecosystem work? Find out more about the project’s aims and features, and direct access to its website.
Yamfore, for crypto loans without margin calls or ongoing interest repayments, with indefinite loan terms. Yes, it’s possible!
Yamfore, how does this ecosystem work?
Traditionally, crypto-backed loans have been facilitated between two parties: borrowers, who seek to keep exposure to their crypto assets but require access to working capital, and lenders, who supply capital to the borrowers in return for ongoing interest repayments on their lent funds. This arrangement has a significant power imbalance, as borrowers are often presented with unfavorable loan-to-value ratios, the constant upkeep of interest repayments, and the possibility of a margin call at any time due to a sudden market downturn. If a borrower fails to meet any one of these obligations, their collateral position is liquidated, and their loan position is closed. This model arguably presents substantial risks to any individual seeking a crypto-backed loan, and remains a far cry from a “set-and-forget” prospect.
The Yamfore Solution
Yamfore takes a different approach by completely removing the lender from the equation. All crypto-backed loans facilitated through Yamfore are directly funded from the protocol’s internal stablecoin treasury. This removes many of the counterparty requirements of the lenders, such as ensuring the value of the borrower’s collateral never falls below a certain threshold, or requiring ongoing interest repayments. Because all capital lent is owned by the protocol, a greater level of risk can be taken on by the protocol on behalf of the borrowers. This enables significantly more favorable loan terms that otherwise wouldn’t be possible through traditional lending protocols or platforms.
Upon launch, Yamfore will utilize a diverse basket of stablecoins. These stablecoins will be backed by verifiable on-chain assets, and be native to the Cardano blockchain, not bridged from other ecosystems. These are the initial criteria for stablecoin solutions launching in conjunction with Yamfore, but the list of accepted stablecoin solutions can be added to or removed via on-chain governance.
Yamfore handles all stablecoins received in its treasury as transitory assets. This is due to the protocol’s main objective of keeping a high level of capital efficiency, thus immediately lending out any capital received to borrowers. Because of this, stablecoins are never “stored” in the protocol’s stablecoin treasury for any significant periods of time. The exact type of stablecoin given to a borrower as payment for their loan position will be determined by the protocol at the moment of a loan initiation, and will mainly be subject to availability.
The Yamfore protocol has an internal treasury that contains 45% (450 million) of the total fixed supply of the native governance and utility token of the protocol, CBLP. This treasury is referred to as the CBLP treasury, and enables individuals to indirectly provide liquidity to Yamfore via depositing their stablecoins into the protocol’s CBLP auction portal. In return, individuals will acquire an allocation of CBLP tokens, which is determined through fair market supply and demand mechanisms.
3 points to remember:
- No Ongoing Interest Repayments: Settle your loan on your terms, with no ongoing interest repayments
- No Liquidation Risk: Enjoy stress-free crypto exposure with no margin calls or liquidation events
- Indefinite Loan Terms: Choose to close your loan position when it suits you best