Have You Heard Of The Equilibrium Genshiro Platform?

Equilibrium Genshiro parachain is a cross-chain platform founded by a cryptocurrency enthusiast, Alex Melikov, with the sole purpose of helping users earn income, borrow and trade on the margin round the clock.

The Concept of Decentralized Finance

Problems Associated with Decentralized Finance

  1. Disintegration of the DeFi Space: The swift rise in DeFi has led to the invention and development of so many decentralized applications (dApps), concepts and financial models. As a result of this diversity and the hosting of other blockchains on the Ethereum blockchain, the DeFi process that was supposed to be effectively managed by end users only, now has a long chain of middle men, making transactions like the peer-to-peer transfers very risky. Not only this, but furthermore, users are forced to monitor their financial positions across various platforms turning the DeFi process into a very cumbersome one.
  2. Missing Cross-chain Composability: As earlier said, operating across multiple blockchains increases risks and uncertainties. These uncertainties force end users to find it more convenient to transfer values between different blockchains but by means of centralized exchanges, and this is also insecure as they have to entrust their funds in the hands of an unknown third party. But be it as it may, the bigger picture here isn’t just this but the fact that liquidity in existing systems is isolated and limited by the boundaries of these underlying blockchain networks; thus, creating a barrier in cross-chain communication.
  3. Technological Risk: One of the greatest problems of DeFi is its technological constraint. Many of DeFi protocols are controlled and powered by the Ethereum blockchain, even up to nine of the largest DeFi platforms. And because of this, there is a very high increase in cyber attacks, bugs and network congestion but not only these, there is also the issue of high network transaction fees, failed transactions and liquidation issues and in extreme cases, it could all just stop functioning.
  4. Asset Risk: This is unarguably the greatest problem of decentralized finance, it is highly volatile. It is definitely no news that earlier this year (2021) the crypto market dipped and a whole lot of investors lost millions of their money. Due to the high instability of the crypto market, the prices of these coins are always fluctuating and it is possible to decline sharply, causing associated liquidity risks or low returns on investments.
  5. Compliance Risk: Because DeFi, itself is a decentralized market, it is always possible for many unincorporated organizations to operate outside the regulatory structures that exist around more traditional financial products. Due to the replacement of the traditional role of the bank as an intermediary or subsidiary body, there are always going to be problems but in cases where these problems are being compounded by these deviant organizations, these problems could lead to catastrophe.

Features of the Equilibrium Genshiro Platform

  • Staking: The Equilibrium Genshiro platform uses a system that allows users engage in risk-free staking by locking tokens into smart contracts that use it as a connecting portal to other blockchains. These smart contracts in turn use stakes for generating additional rewards from the inflation-based economies common in the Proof of Stake (PoS) system. And finally, the platform distributes the rewards to users. But here’s a tip for you, never use all your crypto assets for staking as the lock system might not allow you to withdraw the funds as at the time you need them.
  • Lending: Equilibrium Genshiro platform enables users to lend out part of their assets to others who need or want to borrow them. But unlike other DeFi platforms that involve depletion of the assets being lended and inability of the lenders to leave at their will during such depletion, the Equilibrium Genshiro platform separates the concept of lenders and bailsmen, so far, on the interface level. As a result, bailsmen now have the choice of becoming a lender by setting a corresponding flag when providing cross-chain liquidity. But bailsmen who become lenders stand a chance of becoming entitled to additional system fees that arise from users borrowing their assets. Lenders on the other hand bear no risk of liquidation as they’ve now transferred this risk to the bailsmen. Furthermore, the platform has put in place measures to provide incentives to market participants and make sure that the liquidity of any given asset isn’t scarce.
  • Bailouts: Bailouts simply means a rescue from financial distress. Bailsmen are united under one liquidity pool where they share risks and losses. This kind of system is best suited for highly leveraged borrowing which is quite essential for the growth of the DeFi community. This system allows a bailsman to withdraw funds from the bailout pool only after repaying a respective fraction of the accumulated debt.
  • Borrowing: Now to the last amazing end user the Equilibrium Genshiro platform impacts greatly, the borrowers. Crypto assets carry a volatility risk, so when borrowers use them as collateral, it requires additional collateral and a fee. Equilibrium Genshiro platform gives borrowers an opportunity to supply different crypto assets as their collateral through cross-chain wrapping. Now instead of treating each crypto collateral as an individual unit like other DeFi platforms, borrowers are allowed to pay a nominal fee based on the ratio of their collateral and other associated risks.

Benefits of the Equilibrium Genshiro Platform

  • Separation of Different Assets from Different Chains: This platform possesses the technological capability of going beyond the limits of the Ethereum blockchain. It achieves this goal by adding tokens from the Polkadot ecosystem and even from other blockchains and by so doing, transactions no longer have to bounded to ERC-20 tokens like other DeFi platforms, but, surprisingly, trading pairs can now have access to other blockchains, inasmuch as it is connected to the Polkadot system.
  • Improved Speed and Low Transaction Rates: Have you ever faced a situation where you plan to withdraw money from your crypto wallet but the fees you have to pay, sometimes might even be larger than the amount you are trying to withdraw? So many platforms charge exuberant transaction fees in order for end users to carry about their businesses but at the Equilibrium Genshiro platform, it is shaped in such a way that the Polkadot technology allows it to overcome this issue, as there’s no mining and thus; a decision is reached faster than the Ethereum blockchain. Also, some off-chain workers allow traders to place numerous orders without paying transaction fees,thereby eliminating the transaction fees as opposed to other platforms.
  • High leverage: Equilibrium Genshiro’s approach to modeling collateralized loans allows for competitively low levels of
    collateralization of user portfolios, which means that high leverage is achievable.

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EMMANUEL COSMAS

EMMANUEL COSMAS

Disciplined | Focused | Technical Writer | Tech. Advocate | Crypto project ambassador