Nolus, the cross-chain lending protocol known for supporting leveraged borrowing while mitigating risk, is set to expand its asset offerings. In the coming weeks, Nolus will introduce support for volatile base currencies like Bitcoin (BTC) and Ethereum (ETH). This will enable users to go long or short on these assets while earning additional yield from liquidity pools.
This expansion follows a successful funding round that has raised Nolus’ total capital to $3.5 million. Blockchain venture capitalists are drawn to Nolus’ innovative approach, which combines yield generation with a focus on minimizing risk and ensuring security. The platform’s total value locked (TVL) has seen steady growth, with a lifetime volume exceeding $60 million.
Nolus’ Enhanced Offerings
The new volatile base currencies, set to be gradually rolled out, will increase opportunities for users to profit from market movements. ETH and BTC will be available for lending and borrowing, and users can swap them for stablecoins. When paired with Nolus’ leveraged borrowing solution, this enables the creation of long or short positions.
Importantly, Nolus has assured that users will face no lock-up period for these volatile assets, allowing positions to be closed at any time after loan repayment. Users can earn sustainable annual percentage rates (APRs) between 8-15% through Nolus’ strategies, attracting DeFi participants who aim to increase their earnings without substantially increasing risk.
Increased Profit Potential with Lower Risk
Traditional DeFi lending protocols limit borrowing to around 75% of collateral value to prevent liquidation if asset values drop. In practice, most users are advised to borrow no more than 50% of their collateral to avoid risk. However, this method is capital inefficient, leaving half of the assets unutilized.
Nolus addresses this inefficiency by adopting a model inspired by traditional financial leasing. This system, which has significantly lower capital requirements, allows financing of up to 150% of the initial deposit value by merging the collateral and the loan into a smart contract. The platform’s yields come from interest-bearing DeFi leases, with NLS tokens providing additional rewards.
Flexible Strategies with New Base Currencies
With the addition of ETH and BTC, users will have greater flexibility in pursuing various strategies. For instance, if a user expects the market to rise, they can deposit ETH, borrow stablecoins, and use them to buy more ETH. If they expect the market to decline, they can reverse the process. This approach also offers effective hedging options, enabling users to minimize risk if they hold other positions such as options.
Nolus’ expansion is set to be accompanied by additional platform upgrades throughout the year as it aims to capture a larger share of the multi-billion dollar DeFi lending market.
