What is Justlend: A Tron-Based Defi Lending Protocol

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This article will introduce JustLend, a TRON-based decentralized lending protocol that provides a distributed and secure market where users can receive loans and earn interest at a low trading cost.

Distributed finance (or open finance) has evolved to be one of the key drivers of applications on the TRON network. The core principle of DeFi is to pioneer a censorship-free financial service ecosystem that is immune to centralized authority and accessible to all.

Within the ecosystem, users are their own asset custodians and are granted full asset control and ownership. They can freely access any decentralized market available.

Lending protocols and platforms offer varying incentives to market participants, for example:

  • For borrowers: sell short an asset or borrow the right to use
  • For lenders: earn interest on assets

Compared with traditional financial products, custodian-free decentralized protocols enjoy the following promising edges:

  • Transparency & effective pricing based on market demand
  • Fast and convenient lending
  • Immunity to censorship & immutability

JustLend, the first TRON-powered lending platform, has officially been launched on December 7, 2020. Users can now access via:


What is JustLend

justlend

JustLend is a TRON-powered money market protocol aimed at establishing fund pools whose interest rates are determined by an algorithm based on the supply and demand of TRON assets.

There are two roles within the protocol, namely the depositor and borrower. Both of them can directly interact with the protocol to earn or pay the floating interest rate.

JustLend will first accept:

  • TRX
  • USDT
  • USDJ
  • SUN
  • WIN
  • BTC
  • JST and
  • WBTT as collateral for loans.

Meanwhile, JustLend allows smart contracts for:

  • TRX
  • BTC
  • SUN
  • JST
  • WIN
  • WBTT
  • USDT and
  • USDJ
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To distribute tokens that correspond to underlying assets to users’ accounts at the exchange rate.

Supplying Assets on JustLend

On peer-to-peer platforms where borrowers are matched with lenders, a user’s asset is directly lent to another. By contrast, JustLend protocol pools the supply of each user, which drives up liquidity and strikes a better monetary balance.

Suppliers can withdraw their assets anytime without having to wait for a specific loan to expire, allowing JustLend much higher liquidity than their peer-to-peer counterparts.

Assets supplied to a market are denoted as jToken (a TRC-20 token balance). Token holders can acquire the corresponding jToken by supplying and abide by relevant rules to earn interest.


Borrowing Assets on JustLend

If users (borrowers) wish to borrow an asset on JustLend, they need to first acquire jTokens as collateral through depositing tokens, and then borrow any available asset on the platform.

Unlike peer-to-peer protocols, JustLend only asks borrowers to specify the borrowing asset with no other requirements such as the expiry date.

Borrowing is executed in real-time, and its interest rate will be automatically adjusted based on the market’s supply and demand.

Here’s an example: the interest rates for borrowing TRX and TRC20-USDT might be 2% and 5% respectively.

Different assets have varying interest rates, which are automatically calculated according to the market’s supply and demand.


Interest Rate Mechanism

While the interest of most traditional financial lending accrues by day, interest on JustLend is calculated based on the time of block generation on TRON (around 3 seconds).

The interest rate of traditional financial lending remains fixed for the entire term of a loan. On the contrary, interest rates in the JustLend protocol change in real-time according to the variation in market supply and demand, and the borrowing/supplying interest rates may vary from block to block in different markets.

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The JustLend protocol uses an algorithm to calculate the supplying interest
the rate for each asset.

When borrowers’ demand for crypto asset declines, the excessive tokens available for lending in the pool will bring about higher liquidity and a lower interest rate, thus encouraging borrowing; likewise, when the demand for borrowing an asset is high, the number of tokens available for lending drops, which will result in lower liquidity and a higher interest rate, thus attracting supplies.

Core Architecture of JustLend

justlend architeture

Exchange Rate

In the JustLend protocol, each money market is a smart contract that implements the TRC-20 standard, and a user’s balance is denoted as jToken, which can be minted by supplying assets to the market or redeemed.

The exchange rate between jToken and a corresponding underlying
asset will increase over time.

exchangeRate = (underlying Balance + total Borrow Balance − reserves) / jTokenSupply

Where:

  • ExchangeRate represents the exchange rate at which jToken is converted to the corresponding asset.
  • UnderlyingBalance represents the amount of assets supplied by suppliers to smart contracts, but not yet loaned.
  • Reserves represent the total reserve on the platform.
  • jTokenSupply represents the total circulation of jToken at the moment.
  • Total Borrow Balance represents the amount of loaned assets at the moment.

Strengths of JustLend

  • On JustLend, tokens from the TRON family can be used as collateral for higher rewards.
  • An open and transparent lending environment, quick response and low fees all make it easier for users to use JustLend.
  • Decentralized lending in the TRON ecosystem will also inject confidence to the TRON DeFi ecosystem, and this low-risk borrowing by staking TRON assets will introduce a new way of financial management to TRON users.
  • Powered by the superior speed of the TRON network, JustLend is able to provide loans in seconds.

JustLend, TRON’s first official lending project, is built on the high-performing TRON network with a TPS far outperforming Ethereum and hundred times higher than that on existing mainstream lending platforms.

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With JustLend, an unprecedented financial service for users and even all mankind is on the horizon.JustLend marks the world’s first financial infrastructure that’s aimed at establishing a trust-based Internet system for billions of users worldwide.

It lowers the cost of trust and enables smooth and border-free circulation of crypto assets.

JustLend, the first official lending platform of TRON, will be an unstoppable super-decentralized global financial marketplace in 2021, transforming the real-world finance with the decentralized block world.

Conclusion

This article provides an overview of the TRON-powered JustLend protocol, including the details of supplying, borrowing, and the interest rate mechanics in the protocol.

It also covers the seven features such as asset supplying and order matching, as well as the architecture of the JustLend protocol and smart contracts of money markets.

Fully operated on the TRON network, JustLend provides a high-speed and lower-cost decentralized lending protocol accessible to all.

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