Pledge staking shares/VLPS for crypto loans

1

Suggestion to ola finance: when ola finance works in voltage finance for borrowing, please let users fir the first time ever, pledge staking shares/VLPS for loans.

I suggest this because major stock exchanges already do this. They do this without transferring and since the investments are generating income for users it winds up having value in terms of income it produces. So if they over borrow and it gets siezed. The value of what they pledged can pay off whatever amounts owed unless a portion of the crypto rewards are siezed until the loan is paid.

So it is only a matter of time before i can pledge VLPs which are already deposited and associated to any pairs i am supporting in the yield farming feature. How this can work can be probably handled overtime. This makes lending easy while providing users an ability to obtain a loan with ease on existing assets of their choosing.

Nowadays users can’t just transfer a car into another persons parking lot with no access until the loan is paid. Not everyone is parking cryptos to lend anymore when they may just sell and replenish the fund at no interest. Therefore it makes sense to borrow against existing assets in this case, VLP’s aka LP tokens in yield farming pairs which already produce income. Its like an apartment complex that has recurring income. SO i hope this idea gets considered and or voted on, and i hope we consider advancing the lending platform to do this.

1 Like
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i like this idea, giving users the option to earn a return on their LP investment, farming or using as collateral if and when ola relaunches in the future. :smiley:

3

There’s several protocols that offer a feature similar to what you just described.
Afaik, they call it “leveraged farming”. I’m talking about Alpaca, Impermax etc.

Several things that have to be addressed first:

  • impermanent loss; using LPs as collateral comes with IL so twice the chance your position will go down in value
  • price feeds (imo, features like this would work best with Chainlink)
  • if Ola would add LPs as collateral, then it would technically not be a lending platform anymore, but a yield platform

It would be cool if you can provide links to platforms that allow users to collateralize their LP against which they can borrow.

4

Correct but as long as users agree to tolerate the risks and general risks in cryptos they can still be able to do it and possibly win and benefit from it, depending on what they do and if they are careful enough.

And this suggest is to encourage voltage or ola finance to implement this.

5

I understand, but i still think that less features = less things that can go down.
If Ola relaunches in partnership with Voltage, Voltage will be responsible for parameters such as types of collateral.
This is a nice idea, but i want to see more opinions.