Both Yupana Finance and TezFin (Tezos Finance) now have their testnets launched and expect to launch on mainnet soon.
TezFin has been running on their testnet for months now.
Yupana Finance have recently just launched their testnet on the 9th of June.
Both Yupana.Finance and TezFin (Tezos Finance) are aiming to become the first lending platform to launch on Tezos mainnet.
Decentralized lending platforms are one of the many applications that form the Decentralized Finance (DeFi) ecosystem.
Decentralized lending platforms allow users to earn interest on their tokens by lending them and allowing other users to borrow and pay interest over the loan.
The process is all managed through smart contracts on the Tezos blockchain.
Smart contracts are programs in which the parameters and rules that apply are laid down.
This way, the lender and the borrower don’t need to trust each other and no third parties are needed to facilitate the loan and enforce the rules that apply. True DeFi is trustless, which is what makes it revolutionary.
For an application to be truly trustless, it will need to become fully decentralized though. For that, the way that the underlying code can be changed needs to be decentralized.
This can be done by deploying a DAO.
In a DAO, upgrades and changes (for example to parameters like interest rates) can only be made through a governance process. A governance token is distributed and users can vote on proposals.
In a true DAO, developers of the application can not make any changes without a positive vote on a proposed change.
Both Yupana.Finance and TezFin will not deploy a DAO at launch and will work towards full decentralization after mainnet launch.
People can earn some extra interest on the tokens they hold long term by supplying liquidity to lending pools. Users that borrow from the lending pools, will pay interest on their loans.
The earned interest is partly distributed to the lenders and partly to the reserve fund. Part of that reserve fund is a developers fund for further development.
Users that borrow can do so by supplying collateral in the form of other tokens. This way users can go long on certain tokens without selling the tokens they own.
It is considered a risky strategy since it is only profitable if the profit is higher than the interest rate you need to pay. Additionally, the value of the collateral needs to remain at a certain level or your position can be liquidated.
Since you put up a collateral in crypto tokens, the value can fluctuate quite a bit. This means you’ll have to pay close attention and it is advised to keep your collateral levels at a healthy level.
Besides the fact that values change constantly, the interest rates also change. Make sure you fully understand the risks and all moving parts before you start Lending or Borrowing.
You can read more for example in this Madfish blog post about Yupana.Finance.
Users are now able to try both TezFin and Yupana on their respective testnets and can be found here below:
This way they can help testing the applications and are able to give feedback. But they can also familiarize themselves with the concepts, possibilities and risks.
Yupana.Finance is developed by Madfish Solutions. Madfish brought us Quipuswap, one of the first and most popular decentralized exchanges on Tezos and Temple wallet amongst other things.
TezFin is developed by StableTech. StableTech brought us USDtz, the first stablecoin on Tezos and Tezex, a decentralized non-custodial swap protocol for between Tezos and Ethereum.
TezFin has been running on their testnet for months now.
Kevin Mehrabi founder of TezFin stated:
“We expect mainnet this month assuming all dealbreakers have been debugged.”
Yupana.Finance just launched their public testnet and has not announced a launch date for mainnet so far.
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