Resolving Liquidity #13: Vendor Finance

Resolving Liquidity #13: Vendor Finance

We've found a vending machine that ushers in a new era of liquidity - welcome to our newest partner, Vendor Finance.

With a core focus on permissionless, non-liquidatable, fixed-rate, and fixed-term loan pools designed by lenders themselves, Vendor Finance has redefined benchmarks in decentralized lending and borrowing. And we're here to amplify this innovation.

Entangle Partners With Vendor Finance

Vendor Finance's latest Version 2 (V2) is a significant advancement in the DeFi space, offering fixed-term, fixed-rate, non-liquidation loans. For lenders, the platform converts idle capital into a productive asset by allowing them to create customized lending pools. This increases capital efficiency and reduces risks, thanks in part to the elimination of oracle dependencies. In the case of borrower defaults, lenders can seize the collateral, serving as an effective built-in buyback mechanism.

Borrowers also enjoy the platform's unique features. They can secure loans by depositing collateral, thereby retaining their assets instead of selling them. The no-liquidation policy alleviates the usual stress associated with fluctuating collateral ratios, offering borrowers greater financial flexibility. Moreover, borrowers have the strategic option to default if the value of their loan exceeds the collateral by the repayment due date.

A key differentiator in Vendor Finance's V2 is the introduction of "Strategies"—automated methodologies that optimize capital for both lenders and borrowers. For example, the USDC.e Lending Strategy allows lenders to earn interest on idle funds through the AAVE market. Managed by smart contracts, these strategies enhance the platform's user-friendliness and financial efficiency.

Supercharging Liquidity

By integrating Vendor Finance into our dApp and Liquid Vaults, we're transforming the mechanics of DeFi lending and borrowing. This integration supercharges liquidity and converts idle, yield-bearing assets into Liquid Staked Derivatives (LSDs), which can then be used as collateral.

The outcome is twofold: lending protocols attract more capital, and DEXs get liquidity retention, allowing users to experience greater capital efficiency.

Additionally, the transferability of these LSDs extends their utility across multiple blockchain networks, further optimizing liquidity. In short, this integration doesn't just add features; it enriches the entire DeFi ecosystem, enhancing liquidity, utility, and yield opportunities.

Here’s how users can take advantage of this testnet implementation next week:

  1. Get LP Tokens: Users claim FusionX DAI/USDC LP Tokens from a faucet.
  2. Stake via Entangle: Users stake these LP Tokens in the Entangle Liquid Vaults dApp, receiving a Liquid Vault token as a receipt in return.
  3. Borrow Funds: Users utilize their Liquid Vault tokens on VendorFi to borrow USDC or DAI at a predefined LTV ratio and expiration date.

About Vendor Finance

Vendor Finance offers permissionless, non-liquidatable, fixed-rate, and fixed-term loan pools customized by lenders.

About Entangle

Liquidity Resolved. We provide an interoperable layer that enables web3 DApps and protocols to scale with omnichain liquidity.