The blockchain company Mainframe has taken over Sablier, an Ethereum-based real-time finance protocol.
Mainframe plans to integrate Sablier’s money transfer technology into a fixed-rate credit protocol and create token debt markets similar to digital bonds.
Cryptocurrency loans with less collateral
According to the announcement, “Cryptocurrency loans can create a healthy cycle of speculation, spending, and money in circulation.”. However, borrowers would have little exposure to current over-guaranteed systems:
“Loans secured by cryptocurrency often require collateral rations of 150% or more, and borrowers do not fully improve their purchasing power. With the new mainframe guarantee groups offering safes protection, the collateral rates can be much lower without increasing the risk to the system. “
Mainframe system “would allow borrowers to pay debts quickly to increase purchasing power”. Ecosystem borrowers deposit collateral and coin tokens, while lenders buy token bonds, usually at a discount to repay them at face value at maturity.
Users can also act as guarantors in the log, bundle assets to protect the system against insufficient collateral and earn fees, and buy collateral at a discount if borrowers do not provide collateral.
According to the mainframe, this system should avoid events like MakerDAO’s “Black Thursday”.
Doug Leonard, CEO of Mainframe, said: “Think of debt markets as the lifeblood of an economy. you want to pump the blood and let it flow […] Debt obligations lead to temporary clots, and an over-guarantee limits the efficient flow of money. Mainframe allows lenders and borrowers to withdraw capital from stagnant purses and increase circulation. This ultimately leads to a healthier DeFi room. “