submitted by /u/Circulate_Finance
Circulate is a DeFi lending protocol that enables users to borrow various cryptocurrencies using stable and variable interest rates.
In addition to its typical features on Compound agreements, Circulate has different features, such as unsecured Loans, ‘rate switching,’ Flash Loans, and special types of collateral.
Circulate uses a native token, CCL, to offer its holders a discount fee. In the near future, CCL will also be used for governance and as a first line of defense against outstanding loans.
Circulate has been developed by the Defi Labs team in the US since 2019. Circulate is based on a lending platform on the Tron network. The platform Token is CCL, no Presale, no VC investment, no pre-mining, no team share.
As the popularity of the Tron network increases and the number of users increases, the low cost of the Tron network will lead Defi users to continue migrating from the ETH.
Of all the lending agreements in the market, Circulate offers the most diversified DeFi collateral. Backed by strong liquidity and Nexus Mutual (insurance) protection against smart contract risks, we will see Circulate take a significant market share in the DeFi lending market in 2020.
Flash lending is one of Circulate’s main selling points (since it does not require any collateral).
Flash loan does not need to use collateral to guarantee repayment, the only limit is the repayment time of the loan. A loan is considered valid as long as it is used and repaid in full in the same block in which it was issued. Conversely, if the loan is not paid off in the same block, the whole deal falls apart.
Circulate charges a fee of 0.30% for flash lending — it will provide Circulate with a steady stream of revenue as demand for specific flash lending features such as automated Maker Vault grows.
Flashlending opens the door to safe and reliable arbitrage opportunities for users at almost no cost.
Elasticity of interest rate
While other lending platforms tend to lock users into fixed or floating rates, Circulate’s rate switch allows users to switch between two different types of rates. This allows them to choose between fixed and floating rates to get the best loan rate.
Supported by the new interest rate model, Circulate has seen strong growth in demand for stable interest rate loans since its deployment in September 2020. Similarly, users can leverage Circulate’s interest Rate using Swap Rate, which increases the composability of variable and fixed loan interest Rate management.
It is worth noting that a stable rate is not a fixed rate. On the contrary, they are a more stable variable interest rate and are not susceptible to market fluctuations.
In addition to the more common DeFi tokens such as Tron and USDT, Circulate will soon give users the ability to borrow on tokens such as Uniswap LP and TokenSets. This means that users can borrow against positions that earn them gains-without sacrificing the opportunity cost of not being able to access those positions in order to take advantage of encrypted borrowing.
How to borrow
To begin using Circulate, please visit website and use Tronlink purse to connect.
To deposit funds, select an asset and enter the amount you wish to lend. From here on out, just approve Circulate’s access to the selected asset and sign the transaction to obtain the deposit.
The money you deposit will be made available to the loan pool, and you can monitor your accrued interest in real time in the Circulate app dashboard.
When funding Circulate, users receive wToken with cTokens that function like Compound Finance — give you an interest-bearing asset that marks the percentage of your claim to the underlying asset pool.
Unlike cToken, however, each wToken retains the same value as the underlying asset. For example, an aDAI token is always worth the same as a real DAI token. wToken does not appreciate with interest (as with cToken); instead, the number of wToken in your balance increases.
Keep in mind that each asset has different collateral requirements due to price fluctuations. The stability currency provides the maximum loan-to-value ratio due to its inherent price stability. To learn more about Circulate’s grading process, check out their risk framework.
Each of Circulate’s assets has two separate interest rates. One is a stable rate, one is a floating rate. Users can switch between the two rates at will.
The utility of CCL
The original token of Circulate — CCL — is a token of ERC20. CCL was originally used as a utility token in the Circulate platform. It offers users a variety of advantages, including lower fees, higher loan-to-value ratios, and mortgage incentives.
However, as Circulate was replaced by Circulate, CCL tokens assumed more application scenarios, including platform governance. (Because it’s moving toward a decentralized model.)
CCL holders can vote on the development team’s proposals and set economic parameters (including interest rates, liquidation allocations, and new assets).
The agreement currently USES about 80% of the platform’s fees to destroy CCL on the open market. That means the supply of loans will continue to shrink, which could increase the value of tokens over time.
In the future, CCL will have more collateral to support its governance of the agreement, including requiring payment of agreement fees to act as a first line of defense in the event of a liquidity event for malicious borrowers.
CCL backed assets:
Circulate supports nearly 5 Tron based assets, including, but not limited to:
Usdt-trc20 (USDT), TRON(TRX), JUST (JST), BitTorrent(BTT), etc