Whether you want to start a business, buy real estate, treat yourself to an expensive new car, buy equipment of any kind, or anything else that requires a lot of money, chances are that you are going to need a loan. However, getting one from the bank has been known to be quite troublesome. Banks are very picky about who they grant loans to, and even when if they choose that you are “worthy,” there’s endless paperwork to deal with, waiting periods, background checks, not to mention an interest rate that many see as unreasonably high.
However, since the DeFi sector emerged in the crypto industry, things have changed for borrowers, as they can now get a loan almost immediately, without background checks or any paperwork. All that is needed is a smart contract and collateral.
Of course, when you use cryptocurrencies, you may already have the money you need, but you already purchased crypto and you wish to HODL it in order to profit when the prices skyrocket someday. This is exactly the kind of money that you can use as collateral, as it will be safe in the smart contract for as long as you keep paying back the loan that you’ve taken. Of course, the interest is still there, as the lenders need to profit from lending the money, but the entire process is a lot simpler and more rewarding for everyone.
Even so, there are improvements that can be made, for the process to be even better for the borrower and lender alike, which is what Hifi Finance (MFT) is here to deliver.
How Does Hifi Finance (MFT) Work?
Hifi Finance is a lending protocol that allows users to borrow against their crypto. Pretty much anyone can do this, as the project is highly inclusive and available around the world. It uses a bond-like instrument, representing an on-chain obligation. This is later settled at a future date. Meanwhile, the project also has a unique feature in DeFi which is allowing you to buy and sell tokenized debt at a fixed rate. This fixed-term lending and borrowing is something that really makes Hifi stand out from other protocols, while its token offers its own rewards, including staking rewards, the ability to participate in its governance, and more.
What Problems Does Hifi Finance (MFT) Solve?
Hifi (formerly Mainframe) aims to make lending and borrowing even better than what is already available in decentralized finance, and it does this by providing its own unique solutions, such as:
Fixed-term lending and borrowing
Hifi is a lending protocol that allows anyone to borrow against their crypto, where buying and selling the tokenized debt enables fixed-rate lending and borrowing. While most lending protocols use floating interest rates, this project allows for fixed ones, which ensures that the interest that you need to pay will remain the same as it was at the moment when the debt was made, meaning when the lending happened. That way, even if the prices change, the amount you will need to pay will not, which ensures that you will always know exactly how much you owe.
Sablier Streaming Protocol
Next, the project has introduced a streaming protocol called Sablier. According to the project’s website, this will allow you to get your payday whenever you want, and see your earnings in real-time. The project’s technology eliminates the hassle of running payroll by allowing its smart contracts to stream money without the user having to do anything. The entire process is fully automated, and it can easily work for you, as a lender, to help you make money.
Bridging funds to Polygon
Finally, the project also allows users to bridge their funds to the Polygon’s network, which is a very quick process that takes only around 15 minutes to complete. It is a way to quickly and easily transfer your assets from Ethereum’s mainnet to Polygon’s, and get them back at any time. This interoperability with Polygon’s network is a unique feature that should not be overlooked.
Benefits of Hifi Finance (MFT)
Now, let’s talk about some of the more direct benefits that you get by engaging with Hifi Finance, as there are a few unique ones worth talking about.
Lending and borrowing
Of course, it goes without saying that Hifi Finance lets you engage in lending and borrowing. If you have some extra money in cryptocurrency that you don’t plan on spending anytime soon, you can simply lock it up in the project’s lending protocol and allow others to borrow it. The interest that borrowers pay on the loan will be your reward for doing so.
On the other hand, if you are a borrower, you can quickly and easily get a loan after providing collateral, and use that money to fulfill your dream or do pretty much anything that you wish to do. You still need to pay it back, of course, but if you are in need of money quickly, a lending protocol such as Hifi that can offer funds almost immediately is definitely a good thing to have.
Governance
Of course, Hifi’s Mainframe Token (MFT) can also be used as a governance token, meaning that its holders can use it to vote on various proposals that the community comes up with in order to improve the project. Not only that, but you can also submit your own proposals and let others vote on them if you have an idea regarding how the project can do better.
Staking rewards
Next, you can also use the Hifi Finance project to receive passive income through staking. By staking your MFT, you also contribute to the project’s overall security and you make it safe for other users.
Bottom Line
Hifi Finance is one of the unique, innovative protocols that have brought something to the crypto industry that seems like an extremely simple and obvious addition, but it is still something that it was not present before. Thie single feature — fixed-rate lending and borrowing — can act as a real game-changer for decentralized lending, and it may become part of the standard package in future protocols. For now, however, it is only available on Hifi, so if you wish to use it, this is the project to turn to.
