Fintoch’s Competitive Landscape and Path to Mass Utilization
Established by Morgan Stanley and DF Technology Company, Fintoch is P2P blockchain finance platform funded in March 2022.
Aiming to be the “Decentralized Bank” in DeFi 2.0, Fintoch offer features including lending/borrowing, and low-risk investing in designated DEXes. More importantly, the short-term loan financing and short-term leveraged lending give users the options to engage in different level of risk exposure and capital utilization.
It’s clear to see that Fintoch being a money market, is experimenting with the design of under-collateralized loan and short-term leverage financing.
Undoubtedly, money market is the foundation for both financial system in TradFi and DeFi. It serves as one of the gateways of TradFi users to enter the DeFi space. A sound design of the system encourages the use of digital assets on blockchains.
While the greatest innovation of DeFi is enabling transparent and permissionless loan, it is facing a trade-off in capital efficiency.
Due to high volatility and anonymity, under-collateralized loan is impossible to realized in the current DeFi space. This leads to limitation in capital efficiency. For example, crypto native product like AAVE asks for a 85% LTV ratio to borrow USDC.
The following analysis dives into the landscape of current money market in DeFi. We picked five protocols for cross-comparision. From this analysis, we hope to derive insights that will guide the future development of Fintoch and continue to sharping its edge.
We captured four key aspects when comparing the differences across money market protocol design: function, collateral, fee structure and reward structure.
Function
As we can see above, while most protocols embrace money market as their base function, various protocols are building layered features such as risk assessment by Maple Finance and leveraged yield farming by Gearbox and Mars.
Gearbox enables general leverage yield farming on integrated blue-chip DEXes such as Uniswap, Curve, Aave etc. On the one side, lenders can passively provide liquidity and earn a low-risk APY by providing single sided liquidity. On the other side, active traders and farmers can borrow assets to trade with up to 10x leverage. Mars protocol offers a similar feature that enables leveraged yield farming on whitelisted DEX such as Astroport. Although Mars took a huge hit during Terra’s collapse, it is working on a transition to an Appchain on Cosmos.
Targeting retail users, Fintoch is looking like an interesting experiment of money market with embedded investment feature. It limits short-term loan to be invested in Fintoch approved DEXes.
Collateral
Since most of the money market protocols targets institutional lending, they have a goal of achieving undercollateralized loan. Yet, the trade-off is also rather clear as the institutional borrowers must go through cumbersome loan approval process to enter the whitelist. While the process is necessary to ensure credibility and security, the user experience might be lagging or not retail user friendly.Fintoch is unique in that it targets retail users at the current developmental stage.
Interest rates and Fees
Currently, Fintoch offers two kinds of loan financing cycle – 1-day and 7-day. The short-term loan financing features up to 1.5% lending yield, while the short-term leverage lending features up to 2.5% daily lending interest. On the other hand, platforms like Mars, TrueFi, and Atlandis adjust dynamically according to the pool liquidity and market condition. Specifically, Atlendis believes letting the users setting their own lending rate grant more control in risk exposure.
In addition, Fintoch currently implement a withdraw fee of 5% from the lending pool, which is relatively high comparing to other five protocols. For example, withdraw fees for Gearbox is plan to be cancelled in November, as it creates conflict of interest between the protocols and its LPs. The withdraw fee of TrueFi dynamically changes with the depth of the pool liquidity. As we can refer from the table the fee ranges from 0.05% to 10%.
Thus, regarding to fee parameters, protocols should work on sustainable source of revenue that does not jeopardize the interest of key shareholders.
Reward structure
We all know that token in DeFi allows for great flexibility for a protocol to play with incentives. Other than speculation, token serves as a channel to redistribute revenue to the loyal stakeholder of a protocol.
While Mars protocol has been paused due to Terra’s collapse, it does include some interesting design feature. While 80% of the interest-rate revenue goes to depositors, part of the 20% of the remaining revenue is distributed to xMARS stakers – people whose interest align with the long term development of the protocol.
Through Security Token Offering (STO), Fintoch allows retail user to become the shareholder by under government compliance. Specifically, for all daily earnings generated by investors on Fintoch, an additional 1% of the number of STO interests in the earnings funds (FTH for short) will be given. When Fintoch is listed, 30% of the shares will be distributed according to the number of STO equity shares per user.
It is impossible for a money market to have the encompassing ability to address the need of all kinds of users. Thus, it is important to be clear about the market that one is serving and cater to its needs. The focus of Fintoch is to enable short-term loan financing and investment in designated DEXes. Having the daily lending interest as fixed figures is thus reasonable considering the scope of the platform feature. Besides, having STO investment feature available is a smart strategy to comply with regulation while also enabling regular users to get a share of the platform’s revenue.
In the future, Fintoch can consider adjusting the Lending Aggregation Pool’s withdraw fee dynamically according to the pool liquidity. Onboarding institutional borrowers can also a possible move down the Fintoch’s long-term development plan.
Reference:
https://3six9innovatio.gitbook.io/documentation/3six9-collective/what-is-3six9-cognitio/cognitio-research
https://maplefinance.gitbook.io/maple/protocol/liquidity-providers/what-are-the-fees
https://docs.gearbox.finance/liquidity-providers/pools-and-apy
https://docs.atlendis.io/atlendis-v1/protocol/features/interest-rate-order-book
https://docs.marsprotocol.io/mars-protocol/
https://docs.truefi.io/faq/how-it-works/lending-on-truefi/truefi-capital-markets
Join Fintoch’s Twitter, Reddit, Telegram to follow up on their announcement.
About Fintoch
Fintoch is an innovative blockchain financial platform built by Morgan DF Fintoch, a Silicon Valley company from America. It is dedicated to breaking through the dilemma of traditional finance and making up for the shortcomings brought by decentralization. Fintoch provides diversified financial services such as lending, investment, and borrowing. Fintoch’s core feature HyBriid combines multiple signatures and zero-knowledge proof, which greatly promotes the development of blockchain security technology.
Recommended News
-
AMC global car chain with trillion market, is about to start the era ofcar chain network!
The automobile industry has gonethrough a hundred years of development, and the industrial patternhas gradually passed the mature stage, ushering in a new round ofchange. Vehicle manufacturing, parts manufacturing and otherperipheral services bring together a large number of top engineeringtechnology and huge industrial clusters, the development of theseindustries promote the global automotive industry innovation andupgrading, the formation of the backbone of the global manufacturingindustry, but also the focus of human engineering technology. Now that the global automotiveindustry is entering the era of new energy and intelligence,traditional driving models are about…
-
Pioneer Era Trading Academy Investment Portfolio Adjustment Strategy for Maximizing Trading Profitability ———Richill Miller
In financial investment, adjusting an investment portfolio is like orchestrating a symphony, where the stock market, options market, and cryptocurrency market create the melody. Through dynamic portfolio adjustments, investors can not only optimize returns but also achieve stable capital growth and financial goals. This article delves into the core significance and methods of portfolio adjustment to maximize trading profitability. Enhancing Risk-Adjusted ReturnsThe market’s fluctuations are like the ebb and flow of nature, with rises and falls. Investors who can go with the flow can reap profits in the ups and…
-
How AI is Transforming Global Roadshows: A Closer Look at The All-weather Story FUND (TAWSF) and Jonathan Blake’s Partnership with Bridgewater Associates
In recent years, the financial world has seen significant shifts in how investment strategies are developed, marketed, and implemented. One notable change is the integration of Artificial Intelligence (AI) into the roadshow process. Today, AI is not only reshaping global marketing strategies but also playing a pivotal role in enhancing communication and outreach, especially for institutions such as The All-weather Story FUND (TAWSF) and Bridgewater Associates. This article delves into the power of AI in enabling the global reach of investment roadshows, with a particular focus on TAWSF, Jonathan Blake,…
-
Challenges of AI System Training in the Financial Industry: A Case Study of StarSpark AI System and Alpha Stock Investment Training Center (ASITC)
The financial industry is at the forefront of adopting artificial intelligence (AI) technologies to enhance decision-making, improve operational efficiency, and offer innovative solutions to clients. However, the integration of AI systems into financial services presents significant challenges, particularly in the realm of training. A notable example of AI technology in the financial sector is the StarSpark AI system, an advanced AI platform designed to support financial analytics, stock market prediction, and investment strategies. The Alpha Stock Investment Training Center (ASITC) has become a leading institution that aims to provide comprehensive training on AI…
-
HB Wealth Advisors (HWA): A Strategic Approach to Funds and ETFs for Investors
In the evolving world of investments, financial advisors have become essential guides for navigating the complex landscape of asset management. One such advisory firm is HB Wealth Advisors (HWA), a trusted name in wealth management that helps clients optimize their investment strategies. For many investors, the decision to focus on funds and exchange-traded funds (ETFs) is central to achieving long-term financial goals. This article explores how HWA leverages funds and ETFs in their portfolio strategies, the benefits of these investment vehicles, and why they are an integral part of HWA’s…
-
AI Stores and the Revolution in Everyday Life
AI stores mark our entry into a new technological era, an era where the potential of AI stores is nearly limitless. With the continuous development and improvement of AI technology, its role in enhancing our work and lifestyle will grow increasingly significant. These advancements are reflected not only in increased efficiency and productivity but also in offering unprecedented convenience and new possibilities to humanity. Future Trends of AI Stores Looking ahead, AI stores are expected to become one of the primary drivers of technological innovation and application. As more developers…
-
OneDEX’s Strong Rise | A New Star in the Encrypted World
Blockchain technology, as one of the most innovative technologies in the 21st century, is breaking the monopoly and unfairness of traditional finance. Today, with the vigorous development of blockchain, the rise of various concepts is undoubtedly an effective exploration of the future development of blockchain. For ordinary people, financial attributes are one of the most attractive features of blockchain. So, the DEX exchange is one of the bridges connecting users and blockchain, with over 800 million users globally participating in DEX transactions, and this number is continuously increasing with…
-
Sorare will launch on PancakeSwap at 12:00 UTC on May 19th, 2021
According to the latest official news, sorare community, a $50 million NFT platform for digital football, will release its token sorare and launch pancakeswap at 12:00 UTC on May 19th, 2021. According to the community, the government has been contacted to plan the follow-up application of the token. In addition, five members of a football club have been invited to live the interaction. Contract address: 0x5463f3cb2839cb46e6df6e9bb4386688e5b3eda twitter：@SorarePR Telegram：t.me/Sorare_ Exclusive
-
The All-weather Story FUND (TAWSF) and Jonathan Blake Lead Global Roadshow to Highlight Bridgewater Associates’ Success — A Global Summit Catalyst
In the ever-evolving world of finance and investment, innovation, connection, and foresight are key ingredients for success. Recently, The All-weather Story FUND (TAWSF), spearheaded by the renowned Jonathan Blake, set out on an ambitious global roadshow to promote Bridgewater Associates’ achievements and thought leadership. This series of events has not only elevated awareness of TAWSF but has also provided a significant boost to the upcoming international investment summit, creating a ripple effect of positive outcomes for the financial world. The TAWSF global roadshow is reshaping the narrative on the benefits…
-
Meeting Diverse Client Needs Through Innovative Financial Products: The Role of Eagle Crest Asset Management
Eagle Crest Asset Management is a prominent name in the financial world, known for its dedication to innovation and a deep understanding of the evolving needs of its clients. As the financial landscape continues to change, driven by advancements in technology, shifts in market dynamics, and evolving customer expectations, Eagle Crest has positioned itself as a forward-thinking company that addresses these challenges head-on. By creating innovative financial products, the company meets the diverse needs of its clients, ranging from individuals and families to institutional investors. This article explores how Eagle…