Introducing the Nolus Protocol

DeFi is a revolutionary concept that provides alternative means of self-empowerment for folks who demand transparency, censorship resistance, and better accessibility to a new set of financial products inspired by the existing ones from the traditional world. The current iteration of DeFi has several inefficiencies that prevent it from fulfilling its true potential.

Nolus looks to address the inefficiencies of current money markets by offering an innovative lease solution. Nolus DeFi Lease comes with lower margin calls and up to 150% financing on your initial investment, wrapped in an intuitive UI. However, before going further, let’s address the main problems in the market.

Why DeFi Is Needed and Why It Needs to Change

In 2008, the world reeled from one of the worst financial crises as the housing market crashed. As countries collapsed, a pseudonymous developer named Satoshi Nakamoto created Bitcoin — a monetary system that didn’t depend on a central bank. However, having decentralized money wasn’t enough, and we needed decentralized financial instruments to empower individuals to sustain and grow their wealth.

In 2020, we saw a storm of DeFi apps that allowed users to earn yield on their tokens. While we already had Maker and Bancor, 2020 saw the rise of Curve, Yearn, Aave, Compound, and other protocols that quickly built strong user bases.

DeFi can pose as a more efficient alternative to traditional finance, but there is still a long road for the sector to reach users and gain global adoption. In the near future, we are prone to seeing financial products and markets that we are used to in traditional finance gain their own DeFi versions.

Spot markets, future markets, and lending already exist in the crypto sector, and now another product has surged in the decentralized environment: leasing.

The main challenge that several DeFi projects face is to reach an audience unfamiliar with the whole DeFi concept. The process is straightforward: understand users’ inefficiencies in traditional finance, work them out and make it easy. And that’s what Nolus is here for.

Problem #1: Over-Collateralized Loans

The market’s potential is restricted by the overabundance of locked-up collateral since it wastes capital that could be used to minimize counterparty risk. Nolus DeFi Lease reduces the level of collateralization by a factor of 3 by offering financing up to 150% on the initial investment.

Problem #2: Risk of Liquidations

Users that want to maximize their gains are exposed to a high risk of liquidation that could result in a total loss of equity. Compared to the market average, Nolus DeFi Lease’s liquidation rates are 40% lower than the market average (all parameters equal).

Problem #3: High Costs

DeFi lending solutions feature variable interest rates that can spike up to 30%. With Nolus, total costs of financing and transactions are low, close to 10%. The never-changing interest rate is locked at contract creation, with little to no additional cost for transactions.

How Nolus Enriches DeFi Lending With Its Lease Solution

At Nolus, everyone should have the means to manage their wealth in DeFi efficiently. To make this possible, innovation has to be put at the forefront so that new individuals and institutions cannot only meet the needs of the existing DeFi user base but also find a safe haven to park their assets.

Over-collateralization means you need to lock a hefty amount upfront as collateral which might be too costly for some borrowers who want to get more for their holdings.

Nolus’s DeFi lease system provides users up to 150% financing on their initial investment, significantly reducing the collateralization required. The DeFi Lease also offers significantly lower transaction and financing costs, with a fixed interest rate locked at the time of the contract creation.

Another big problem with lending on DeFi is the liquidations. As we have seen during the black swan events, people lost millions of dollars from cascaded liquidations as the markets crashed. Liquidation protection needs to be more robust, which is why the Nolus DeFi Lease offers a 40% lower liquidation rate than the market average, going as low as a 67% decrease in the asset price.

Summing Up

We have created the Nolus protocol to offer an alternative, innovative approach to the markets, enhancing trust and transparency while addressing the inefficiencies in the crypto lending segment. With no shortage of innovative DeFi projects over the years, 2022 through 2023 seems to be the period in which the sector will enjoy some limelight.

The idea is that more and more financial services are accessible within DeFi, without the user needing vast expertise to use them. To make this possible, the product offering of the Nolus Protocol is wrapped up in an intuitive and easy-to-use UI.

With this, more people within the crypto community will be able to increase their equity, and those who want to take advantage of this new class of financial products will find a facilitated and cost-effective entry.