Algorand Welcomes Algofi Liquidity Protocol, Offering a Lending Market, Stablecoin and Liquidity Incentives on Its Blockchain

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Algorand Welcomes Algofi Liquidity Protocol, Offering a Lending Market, Stablecoin and Liquidity Incentives on Its Blockchain
Algorand Welcomes Algofi Liquidity Protocol, Offering a Lending Market, Stablecoin and Liquidity Incentives on Its Blockchain

Algofi is a fast, low-cost crypto lending market and stablecoin on the Algorand blockchain that makes decentralized lending widely available. Algofi plans to offer traditional banking services like savings accounts and credit cards backed by Algorand’s growing DeFi ecosystem.

Algofi Liquidity Protocol Launches on Algorand

According to an announcement on December 18, Algofi’s easy-to-use platform now runs on Algorand and enables everyone from native crypto traders to less tech-savvy retail users to earn interest, access leverage, and borrow against their cryptocurrency assets. With this release, Algofi will also shape the native protocol stablecoin AlgoStable (STBL).

The release of Algofi completes the trio of core protocols on Algorand and prepares the launch of the DeFi ecosystem of the blockchain. These three include AlgoFi, Tinyman, a decentralized exchange (DEX) based on Algorand, and Algomint, a digital assets mint that provides a bridge between Algorand and other blockchain protocols.

Algofi co-founders John Clark and Owen Colegrove, who met while working at Citadel stated that their goal with Algofi is to develop projects that support real-world financial activities to the extent that companies can ultimately benefit. They also noted that they are excited to start today and believe this is an important step in building a new and more inclusive modern financial system.

A key component of this release is the creation of STBL tokens, the motivation of which is to increase capital efficiency.

Co-Founder Owen Colegrove stated that If we watch the DeFi market today, we see that separating the lending and stablecoin mining will lead to capital inefficiency, and we strongly believe that maker and compound don’t have to exist as separate protocols. He also noted Algofi bridges this gap by locally integrating stablecoins into lending protocols. This structure better achieves maximum market efficiency and offers borrowers the lowest stablecoin interest rates in any ecosystem.

Algofi will mint 1 trillion STBL at the beginning of the Algofi protocols. Algofi users are able to deposit any of their supported assets and mint STBL against their collateral. Every STBL in circulation is fully backed by user collateral, as is any loan issued under the Algofi protocols.

Algofi will continue to roll out new features in the coming months, including a governance portal that allows attendees to vote on changes to the protocol and liquidity incentives – including ALGO reward for early adopters through the Algorand Foundation’s Aeneas Liquidity Program.