Stablecoins Used by Liquidity Protocol to Prevent Permanent Loss

Liquidity holds a central role in the world of Decentralized Finance. A lot of protocols have generated different options to have their liquidity ensured. 

It’s Been a Heavy Outflow for Months 

Note that the DeFi sector has witnessed a heavy outflow in recent times. Having to maintain liquidity is becoming a challenging task. The latest solution in the market is now focused on cross-chains.

Experts say cross-chain solutions hold more promise for the future of Decentralized Finance. A liquidity protocol, Symbiosis Finance, has created its cross-chain liquidity solution which is based on stablecoins. Symbiosis Finance’s liquidity protocol makes use of stablecoin so that liquidity providers don’t incur permanent losses.

Symbiosis co-founder, Nick Avramov, said the protocol has secured first liquidity from firms like Binance. Others include Amber and among others. It plans to attract more liquidity providers when it reaches $100 million in transactions.

The use of stablecoins doesn’t just ensure impermanent loss but also aids seamless transactions. The smooth transactions involve all blockchains and require just a click. This is the main reason behind using stablecoin rather than other crypto classes, Avramov said.

He said further that the platform enables swapping native assets. It doesn’t just deal with pegged non-liquid assets.

Symbiosis Finance enables swapping across blockchains. It goes between any blockchain that enables ECDSA and EdDSA keys generation. 

The implication is that anyone at all can exchange. Say ERC-20 for Polygon or other assets on Binance Smart Chain.

Web3 as the Building Block of the Future

Avramov also spoke about the future of web3 acknowledging that interoperability is important for adoption. Therefore, multi-chain and cross-chain solutions are the bricks of a web3 ecosystem.

Symbiosis has equally given attention to its product’s interface. This is to ensure that users have a seamless experience while interacting with their product. The product removes the necessity of moving between virtual networks in the process of swapping.

All the processes have been taken care of at the backend. Smart contracts were deployed for that purpose.

Some of the most prominent heists in recent times have taken place on cross-chain platforms. This has caused users to be worried about their security architecture. Avramov said is part of Symbiosis’ major priorities and it has passed tests from various firms.

Symbiosis Finance has got an investment from Binance Labs secured in February. The firm proceeded to launch its beta mainnet in March. Symbiosis has gone ahead to seal other partnerships since then while being integrated by different platforms.