The current state of the cryptocurrency market comprises numerous participants viz. Investors, traders, lenders, borrowers, and arbitrageurs among others. They exchange hands to the tune of billion dollars’ worth of digital assets in custodial & non-custodial markets. Niche markets like decentralized finance, popularly known as DeFi, have presented users with limitless opportunities and a plethora of choices. The advent of open finance enabled by millions of lines of code has the potential to self-regulate, design new regulation, build community governed regulatory approaches across the otherwise most centrally regulated industry in the modern world. It has the potential to empower a billion lives with better access to financial products of choice. DeFi protocols & products have evolved over the incumbent Binance Smart Chain and are ready for expansion. While the inherent problems of the Binance Smart Chain are a great barrier to adoption & scalability, there’s a dire need to instill sophistication in the existing digital assets markets to elevate it to a level at par with traditional markets. Market participants lack imagination when it comes to trading the time value of assets. Incentives in the form of interest rates derive motivation for the deployment of unutilized assets. The efficient utilization of time value of assets leads to wealth creation in markets whilst value transfer between participants who seek (borrower) and who gives (lender). Presently, most digital assets are mispriced and carry high volatility over a longer time frame. Hence, holding digital assets with depleting principal value is demotivating. Therefore, users seek new incentives & frameworks to offset the losses and cope up with higher transaction costs and complexity. In this paper, we introduce a decentralized system for the frictionless borrowing of digital assets on layer 2 networks to tackle the shortcomings of existing systems, making money markets efficient, and creating higher-yield bearing opportunities.
