In a bold move, Base, the layer 2 network, is moving into the future by launching non-custodial liquidity markets. This launch marks a fundamental shift in decentralized finance, bringing with it a combination of innovation and automation.
It offers a new way to use trustless smart tracks, which will enable the seamless connection of liquidity pools with their borrowing counterparties.
The powers behind the revolution
Big names such as Seashell, RNG Labs, and Loreum Labs are joining forces for this innovative initiative. In addition, the company has the experience of advisors and collaborators from notable projects such as Ampleforth and Uniswap.
Their combined brainpower has given rise to the Seamless Protocol, an evolutionary version of Aave v3. This is different as it allows trac with pre-established borrowing strategies to execute under secured debt directly on-chain.
But what does unsecured debt mean for the average citizen? Think of it as taking out loans for specific purposes, whether for housing, vehicles, or education. In such setups, the liquidity provider has a clear idea of the liquidity deployment.
There is no ambiguity; there is no scope for the borrower to divert it to alternative uses. This clarity and purpose-driven focus is what the Seamless Protocol offers.
Defi borrowing in the Crypto Arena
The concept of loans without sufficient collateral is not something new in the cryptocurrency field. We have seen its flashes in setups like Maple Finance. But here’s the problem: Maple Finance primarily serves institutional and qualified investors using unsecured products.
And the journey is not as easy as it seems. Borrowers go through a combination of on-chain and off-chain processes. They first go through the hoops of terms negotiations with Maple staff before a chain loan finally sees the light of day.
However, Base, with its new market, aims to simplify this labyrinth. It’s about rationalizing. When borrowers are clear about their liquidity needs, why not simply merge these processes? Seamless Protocol does just that.
Incorporate these borrowing strategies into smart on-chain tracks. This transparency ensures that liquidity providers have an unobstructed view of the application of funds.
Furthermore, the protocol is not limited only to loans for specific purposes. There is room for general-purpose loans, such as personal loans suitable for various situations. However, they are not free birds. They are tied to typical DeFi regulations, requiring over-collateralization.
Why seamless versus others?
Seamless sees its solution as the puzzle piece that DeFi was missing. They’re not buying into the hype of on-chain reputation metrics or dent systems, even if it’s as flashy as the WorldCoin personality test.
For them, the golden ticket to debt without sufficient collateral is on the rails of intelligent track systems. It’s about getting back to the core, embracing the true essence of cryptocurrencies and DeFi. Trust the code, not humans, seems to be their motto.
In the end, as the world of decentralized finance spins at a breakneck pace, Base’s latest venture with non-custodial liquidity markets is a testament to where the future is headed.
With the backing of some industry heavyweights and the innovation of Seamless Protocol, the rules of the game are set. Only time will tell if Base will set the standard or if others will rise to challenge his dominance.
But for now, all eyes are on them and their bold step into uncharted territories.
