Cryptocurrencies have solidified their position as one of the most profitable asset classes. Despite the market volatility, the top coins by market cap have provided investors with very high returns over the past decade. As an evolving market, we have seen how those who openly claimed crypto and Bitcoins who were in a bubble, are now shifting sides. From conventional investors and asset management firms to Wall Street giants, all are now wanting to get on the boat.
While the crypto market is already about 2 trillion in size, many are still holding back as they have concerns about the future of cryptocurrencies and find DeFi complex. The concerns of investors are genuine. If decentralised finance (which will define the future of crypto) is to be taken to the mainstream, it must develop next-gen solutions that provide investors with better returns and opportunities along with the same level of security and ease of access. MELD has worked to solve this particular challenge and it seamlessly bridges the gap with its innovative and practically useful DeFi solutions. It eliminates the most pertinent concern of the average crypto investor, which is to get cash for crypto and leveraging crypto assets like conventional for monetary gains. No doubt the project is already getting traction from both retail and serious institutional investors. While the offerings for MELD are simple and easy to follow because of their real-life utility, we will dig a bit more into the project and learn more about how effective the solutions are.
Decoding MELD: Objectives And Business Philosophy
To a great extent, it is the core ideas and concepts that go into the very foundation of any innovative solution that defines the prospects of a business model. MELD is not just a typical product that offers a solution; it has a broader approach and is driven by the idea to financially empower the financially marginalised. A significant percentage of the global population remains unbanked; they have no access to financial tools. The conventional financial ecosystems are capital intensive and have failed to connect global finance as DeFi can. The ability of a decentralised financial model to financially empower those who have no access to modern financial tools has been acknowledged, researched and tested. What remains is delivering a solution that translates the technology to real-world practical utility. This is where MELD steps in, and following months of rigorous testing, it has come up with a scalable and sustainable suit of DeFi products that will help the evolving industry, on the whole, accomplish the wider goals and also provide cryptocurrency investors with unique opportunities to leverage their crypto assets like never before.
“MELD is an open-source, non-custodial liquidity protocol for borrowing fiat (USD and EUR) against crypto collateral and earning yield on deposits. It is the first decentralised protocol that incorporates fiat loan capabilities into the crypto ecosystem. This enables low friction transactions between crypto and fiat positions, while maintaining control of digital assets.”
It is simple; MELD allows crypto owners to get cash advances and use them for their immediate requirements, while they continue to enjoy the benefits of their crypto ownership. Like any other conventional asset, for example, Gold, users can easily get cash for crypto and also benefit from value appreciation of their crypto assets. MELD enables crypto investors to also lend crypto assets and earn interest, which is generated through the MELD protocol. The concept of crypto collateralised loans will revolutionise the market and radically change the way that people perceive crypto investments. Let’s explore a bit more about MELD’s flagship Crypto Collateralised Loans.
What Are MELD’s Crypto Collateralised Loans
MELD’s crypto collateralised loans enable crypto owners to get cash for their crypto assets. To cater to the needs of different crypto investors, MELD provides a one-stop solution. Predominantly, crypto investors have to sell their crypto holdings to get access to cash, which they use to pay their daily expenses. With MELD’s crypto collateralised loans, crypto traders and investors can simply park their crypto assets with MELD and get instant cash. MELD holds the tokens but the ownership remains with the token owners. This means that if you’re borrowing cash against crypto collateral through MELD’s protocol, you enjoy all the benefits of owning the locked crypto asset.
The entire process is decentralised and easily accessible. To get cash against crypto, users will first “deposit their cryptocurrency to MELD as collateral. The protocol will then use the deposited cryptocurrency to create a collateralised debt position (CDP). A smart contract records the terms of the loan and registers it on the blockchain. Upon KYC/AML confirmation, the protocol will execute a wire transfer directly to a bank account. Users will be able to manage their CDP directly from the MELDapp.”
One of the biggest advantages of using MELD protocol over other similar service providers is that MELD can offer capital-efficient CDP because of their decentralised autonomous model. The purpose is not to generate profits in the process but to make DeFi accessible to all. Moreover, MELD users can repay in cash using the MELDapp. It is designed in a way that MELD can “offer more competitive rates and react to market conditions within seconds”.
Similarly, for investors, MELD offers the best interest-earning opportunities with ultimate security. Because the MELD protocol processes only 50% of the market value of crypto collateral as cash, investors enjoy ultimate security. In case, there’s a default caused by a crypto-backed fiat loan position, the MELD protocol liquidates the crypto position to fiat and automatically reimburse the fiat borrowed back to the fiat liquidity providers.
MELD also has an ingenious crypto loan offering, which it calls Genius Loans. MELD’s Genius loans are “self-repaying loans”. What sets apart MELD’s Genius loan for typical crypto collateralised loans is that a “part of the yield generated by the collateral goes toward paying down the principal on the loan. Based on their models, it will take between 3 and 6 years to repay a USD 100,000 loan, depending on the market conditions.”
Explaining the utility of this radically innovative financial product, MELD’s white paper states: “This product can offer users self-repaying loans by capturing some of the trading fees (APY), generated by DEX aggregators utilising our LPs for swaps. These fees apply to repayment of the loan over time. This type of structure is unique to the financial industry and it is only possible through the decentralised nature of DeFi.”
In addition to crypto collateralised loans, MELD has a suite of different DeFi products. It also offers a MELD Debit card, which acts as a conventional card, allowing users to open a line of credit against their crypto holdings. They can use the MELD card to get access to instant cash anytime and anywhere. MELD’s Crypto-Backed Credit Line (CBCL) works as “a fiat loan where smart contracts collateralise cryptocurrency and 50% of the collateral value serves as a line of credit.”
How Easy It Is To Get Loan Against Crypto
Getting a loan against crypto assets with MELD is very easy. It is a simple process and within a few minutes, MELD users can get at least 50% of their crypto assets’ current market value in cash. To make it easy for both investors (lenders) and borrowers, MELD has designed a dedicated MELDapp. Users can download the app from the App Store and Play Store for Android and register. Once they register, they need to go through a simple KYC and AML procedure, following which they become eligible to access all the features.
Using the MELDapp, users can lend and borrow fiat against crypto collaterals. Customers using the app can transfer or link crypto assets to different blockchains and wallets such as MetaMask with a click of a button. Integrating a seamless user experience allows users to create and deploy smart contracts from a straightforward and intuitive user interface. MELD also claims that integration with Cardano and Polygon allows them “to greatly reduce fees for transactions and any other protocol interactions performed within the app.” The best part is the MELDapp can also be accessed via a chrome extension, which makes it easier for desktop users.
Once processed and verified, users can deposit crypto and get instant cash in their accounts. Likewise, they can also use the app to repay their loans. Upon full repayment, they again get their crypto assets unlocked. Additionally, users can get a MELD debit card, which can be used to get cash against crypto by opening a line of credit. The card makes it even easier to get cash for crypto collaterals from anywhere in the world.
Is It Secure?
MELD is highly secure. It has deployed the latest and most advanced security protocols to protect the ecosystem from cyberattacks. MELD has also dedicated an additional budget for security research and operations. The project has partnered with researchers and cybersecurity experts to make continuous developments on the security front.
Commenting on the security aspects and what steps MELD takes to protect investors, MELD explains: “We constantly attack our work and people on paper, private networks, public networks, and on the Cardano blockchain. This is an effective and required way to find vulnerabilities to patch. We accomplish this through our security engineers, third-party auditors, and AI bots. For example, when too many parameters are involved for human beings to process, we can train reinforcement learning agents to optimise a vulnerability metric of our economic model, to then give back protocol parameters and market conditions that lead to it, for us to find preventive solutions.”
Benefits Of MELD Tokens
MELD tokens have multiple utilities, including protocol governance, incentivisation, fee reductions and protocol insurance. MELD tokens allow users to save on transaction fees and also make additional incomes through staking. Users can also stake their MELD tokens to generate fixed rewards. Moreover, the decentralised and autonomous protocol allows users to participate in the governance of the MELD ecosystem.
Apart from the utility of the MELD tokens within the ecosystem, the tokens offer significant benefits to users as they are poised to become a market leader. MELD has peculiar advantages over competitors and has an enormous playing field. Explaining what distinguished MELD from its immediate competitors, MELD claims: “Competitors like Nexo use Ethereum as their layer-1 and high transaction fees affect their efficiency. Blockfi utilises tiered earnings on interest rates with support from centralised Gemini exchange and deeper traditional Wall Street backgrounds. Celsius provides a layer-1 chain with untested security standards and tier-based rewards.”
As already mentioned, users can leverage their MELD tokens to earn fixed rewards and APY. MELD’s dedicated staking pool protects protocol lenders in case of cascading liquidation, and in case some collateral is sold below the loan value. It also compensates users in case of impermanent loss on the AMM protocol. MELD also provides users with flexible options. They can choose to stake their MELD tokens with or without duration. Users who stake with duration will receive a multiplier on their reward share. As an investor, becoming a part of the MELD protocol is a unique opportunity to become an early investor with a project that’s a market leader in the making.
MELD looks promising as it offers practical utility for cryptocurrency investors and owners. It has a broader vision, and the team behind the project has a proven track record of delivering innovative financial solutions. The project also capitalises on the technical prowess of the world’s top engineering group. Going through their detailed white paper, which categorically explains the features, functionalities and details of the underlying architecture, shows how clear MELD is about what they have to offer. Moreover, the current market trends show how the DeFi market is on a roll. MELD tokens can be a great option to start your DeFi journey.
Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day! Live from the Platinum Crypto Trading Floor.
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