Understanding the Paribus Ecosystem
As of 28th March, Paribus launched its MVP mainnet on arbitrum. To learn more about this launch click this link.
Today, I will love to take a look at the contributors to the Paribus Protocol. As we know, operating on the Cardano blockchain, Paribus is a decentralized application (dApp) facilitating a permissionless and censorship-resistant borrowing and lending protocol for non-fungible tokens (NFTs) with cross-chain interoperability. Moreover, the application enables synthetic assets and liquidity positions. The project’s mission is to provide an all-in-one solution for synthesizing off-chain assets as NFTs and transforming them as financial instruments. Furthermore, to truly embrace the interoperable potential, NFTs are available to use across multiple applications on multiple blockchains.
In the course of this study we will be looking at the roles of the two major contributors in the Paribus Ecosystem. Before we proceed lets take a look at the overview of Paribus Ecosystem.
The Paribus Ecosystem
Paribus is a decentralized application (dApp) that runs on the Cardano blockchain and provides a permissionless and censorship-resistant borrowing and lending protocol for non-fungible tokens (NFTs) with cross-chain interoperability. Furthermore, the application allows for synthetic assets and liquidity positions. The project’s goal is to provide a one-stop shop for synthesizing off-chain assets as NFTs and converting them into financial instruments. Furthermore, in order to fully realize the interoperable potential, NFTs can be used across multiple applications on multiple blockchains.
“If it can be verified, it can be sold,” says Paribus. Paribus, which provides a super-fast service thanks to Cardano, provides new opportunities for investors that are not available in the traditional investment industry. Paribus allows users to tokenize any off-chain asset that can be verified by using an innovative approach to decentralized finance (DeFi) and non-fungible tokens (NFTs). The NFTs can then be used in the platform’s borrowing and lending protocols, creating new utility for otherwise underutilized assets.
Paribus is one of the first Cardano applications to launch, bringing with it several first-mover advantages. As a result, the platform will gain exposure to the ever-expanding market of Cardano blockchain users. Cardano, which is only halfway through its five-phase launch, anticipates continuous growth.
The ability to deploy a chain-agnostic fully-interoperable decentralized finance (DeFi) protocol is a key factor in choosing the Cardano blockchain. As a result, the Paribus network can provide its users with the ability to generate value from their off-chain assets, which can then be freely transferred across the DeFi industry. The Cardano blockchain appears to be the ideal choice for deploying a DeFi application compatible with multiple asset types from multiple chains for the project.
The Governance Token of Paribus Network
The native Paribus token (PBX) is the key to protocol governance, with token holders only required to stake a certain amount of money. The protocol is currently under the team’s control. However, in accordance with the project roadmap, Paribus intends to build a decentralized autonomous organization (DAO) infrastructure within the next five years. This will hand over control of the network operations and protocol from the team to the holders of PBX tokens.
The main objective of utilizing the Paribus token (PBX) with governance is to allow anyone to contribute. As a result, PBX token holders across the protocol will align self-sustaining platform incentives. Holders of PBX tokens can act as an investor, trader, or participant in the borrowing and lending protocol. Platform governance can benefit the Paribus protocol, asset security, and the project’s PBX token holders all at the same time.
Ecosystem Contributors
Users of the protocol can play one of two important roles: borrowers or lenders. The platform’s lenders are referred to as “hodlers” in the alternative. This group consists of cryptocurrency investors who have no plans to sell their assets.
The protocol, which is critical to the Paribus network ecosystem, incentivizes lenders on the platform. Paribus allows all lenders to earn a passive income from their assets. Users only need to stake, while the protocol safely lends out their assets, earning them interest in the process. This is despite the fact that many different types of underlying assets may be increasing in value at the same time, providing asset holders with multiple sources of income. Furthermore, the platform offers annual percentage rate (APR) calculations to help lenders estimate their returns on various assets. Lenders, in turn, can be compared to liquidity providers, providing assets as liquid capital for the protocol to lend out.
The borrower is the Paribus network’s second user role. Borrowers can only obtain loans that are fully collateralized. This means that borrowers must deposit at least 100% of the amount they wish to borrow. In a roundabout way, this means that borrowers are also liquidity providers. Borrowers, on the other hand, are critical to the smooth operation of protocol operations, and they pay a small one-time fee for taking out a loan. Furthermore, borrowers must pay a low interest rate on the loan. The proceeds are reinvested in the protocol and PBX token holders.
Looking to learn more about Paribus, click the following links;
Website: https://paribus.io/
Twitter: https://twitter.com/paribus_io
Telegram: https://t.me/paribus_io
Medium: https://medium.com/@paribus_io
Discord: https://discord.io/paribus
