Hashstack Finance has announced the testnet debut for its Open Protocol.
The protocol seeks to provide under-collateralised loans to users.
Users can receive loans of up to 3 times their collateral.
Hashstack Finance has announced the debut of a testnet for its Open Protocol. This will be the first decentralised finance (DeFi) lending protocol offering non-custodial and secure under-collateralised loans.
Hashstack Finance is a protocol that seeks to provide under-collateralised lending platforms to retail crypto investors. It provides loans with 3x collateral to meet the personal financial needs of individuals. Access to under-collateralised loans prevents users from selling their long-term holdings to meet their short-term needs.
Hashstack announces testnet debut for its Open protocol
The launch of this testnet marks a major milestone in Hashstack’s roadmap towards unveiling a mainnet in the coming weeks. Open protocol is the only autonomous lending solution in the DeFi sector, enabling a 1:3 collateral-to-loan ratio.
Through this platform, an investor with $100 as collateral can borrow up to $300. A trader can withdraw $70 out of this amount and invest the remaining amount on in-platform trading capital.
The founder of Hashstack, Vinay, stated that this model would be different to what is provided on other DeFi platforms such as Compound, Aave and MakerDAO. These platforms allow users to receive collateral higher than the amount of loans they want to secure, whereby collateral of $142 is needed for a $100 loan.
“In comparison, through Hashstack’s Open protocol, you would be able to borrow the same $100 with collateral as little as $33.33. This 4.25x value-add against every established market player today is a remarkable milestone for the DeFi ecosystem in general and will drive further adoption,” Vinay said.
The announcement notes that this will be the future of DeFi lending. It allows users to borrow money on DeFi lending platforms for their personal needs.
A three-step approach
Hashstack Finance notes that a three-step approach will enable this DeFi capability. The first is clearing the compartmentalisation of APY and APR on deposits and loans with MCP.
The second approach is effectively utilising assets by diversifying the available assets through lending and offering trading capital. The last approach is meeting the objective to achieve under-collateralised loans. The platform will support Bitcoin, USDT, USDC, BNB and HASH during the initial stages.