Kord.Fi Is Live On Tezos: Lending, Borrowing And Levered Liquidity Baking

Kord.Fi Launches

The Kord.Fi team has announced the launch of the first lending protocol on Tezos in a completely decentralized way. After successfully running a testnet, Kord.Fi is now live.

What does this mean for the Tezos ecosystem? With the help of the Kord.Fi protocol, it is possible to lend tez (and tzBTC token) to the liquidity providers in a completely novel way that does not include any intermediaries.

All of it will be done through the awesome power of the Tezos Blockchain and the Kord.Fi smart contracts that are deployed on Tezos.

In theory, this means that you can earn extra yield on your tez holdings without any additional intermediary risk.

Remember that “DeFi – “Decentralized Finance” essentially means trustless, free exchange of assets and this is what the Kord.Fi protocol helps to deliver.

It matches borrowers with liquidity baking lenders through the smart contracts, embedded into the Tezos blockchain, bypassing any potentially risky intermediary services.

At Kord.Fi, liquidity bakers (users who provide assets to smart contracts that boost exchange rate liquidity) can use the assets borrowed from lenders to gear up returns from liquidity baking with the help of leverage.

Borrowers (which are called Farmers within the Kord.Fi protocol) take funds from the Lenders and repay them with interest.

The amount Lenders earn depends on the so-called utilization rate that describes what percentage of potential collateral provided by Lenders is employed by the Farmers at any given moment.

Typically, the interest rate on Lending through Kord.Fi fluctuates around 10-15% pa. This way Lenders can earn extra money on their Tezos (or tzBTC token) holdings without much additional risk or need to sell/swap their holdings.

Farmers greatly benefit from the ability to use the funds supplied by Lenders to increase the amount they invest into liquidity baking contracts on the Tezos Blockchain.

This results in the ability to earn fees for liquidity provision that are much higher than the current “standard” for Tezos liquidity baking – 50-100% (depending on the leverage employed) vs 25-30%. 

Important To Note The Risks

Please note, that the project is still in beta and Kord.Fi has not completed an audit yet, so it should be used with caution. 

It is advised by Kord.Fi to study the provided documentation here and you understand the underlying risks.