Several products and services exist in the conventional financial system but have yet to be offered in the crypto market. Yet, there is a project in the works that will give crypto holders financial services that current people are used to getting, but without the need for any middlemen.
Equalizer’s creators describe it as a “next-generation quick loan marketplace” that connects liquidity suppliers and borrowers. Borrowers (or arbitrageurs) may get a broad range of highly liquid tokens.
These borrowers may then utilize the money to trade, execute market movements swiftly, and take advantage of liquidation chances. Third-party apps may also use these liquidity pools to rebalance their portfolios or to offer short-term collateral for DeFi services (loan, deposit, swaps) when interest rates change.
Equalizer Finance was the first specialized platform for flash lending, and it currently provides a lot of advantages to cryptocurrency fans. Do you want to know more about them? Let’s travel with Coincu to learn more about this initiative.
What is Equalizer?
Before learning about the project, we shall define the notion of flash lending.
Since there is no matching centralized financial product or service, flash lending is a breakthrough financial product unique to the realm of decentralized finance. Borrowers may take out a loan, utilize it for lucrative operations, and repay it with interest all in the same blockchain transaction.
Flash lending, by definition, adds dimension to the notion of democratized finance by enabling anybody to participate as a significant participant in the field under any given condition, making the most of the overall liquidity accessible on a platform.
Since the loans employ all of the Vaults’ available money, there is essentially no liquidity risk. As a consequence, activities that were previously exclusively accessible to a small number of people or organizations with a lot of money are now open to everyone.
Flash lending is blockchain-specific and is founded on a few important characteristics, including the fact that they represent no risk to the lender and that the loan amount is limited by available money rather than the borrower’s capacity to pay.
No security is required to cover the risk since the lender is risk-free. Its benefit is that users may borrow money from the repository quickly and conveniently; nevertheless, they are limited to the amount that can be returned to memory in a single block of transactions.
The transaction will be canceled if this does not occur. This assures the safety of the liquidity providers as well as the money in each vault. Fast loans are often utilized in investing operations such as arbitrage, collateral exchange, rebalancing, and liquidation.
Equalizer Finance is a decentralized flash loan platform that connects borrowers and liquidity providers. It allows liquidity providers to earn passive revenue from the tokens they hold when they provide liquidity.
This revenue is distributed in the same proportion as the money provided by the liquidity provider and the length of the loan period.
As a consequence, borrowers get access to a wide range of liquidity tokens and may utilize them for a number of objectives, including trading, conducting market-marketing operations, and taking advantage of liquidation chances.
Nevertheless, not just borrowers but also third-party applications profit from liquidity pools in a variety of ways. They have the ability to rebalance their portfolios and offer short-term collateral for DeFi services like lending, deposits, and interest swaps.
How does it work?
Deposits of USDS, BAT, or any ERC-20 token into the Vauts (Smart Contracts) vault are made by liquidity providers. Vauts is a smart contract that strives to supply borrowers with flash loans (Borrows).
The following are the bulk of the characteristics that demonstrate Equalizer Finance is specifically built for DeFi loans:
- Dynamic fees: flash loan costs are set based on governance votes or an automated method to find the optimal balance between offer and demand. They are large enough to attract new liquidity providers while being low enough to be borrowed by arbitrageurs.
- Exclusive incentive plan for persistent liquidity suppliers to consistently stake their money despite significant market volatility;
- Infrastructure scalability ensures fast transaction speeds;
- There are an infinite amount of tokens to choose from since anybody may list them on the platform.
- Emphasis on flash loans: this is the platform’s principal offering, which is distinguished by its flexibility and responsiveness to market developments.
- Because of a standardized and open toolbox (API), integration with other protocols, scripts, or bots on the market is simple and quick.
- Compatible with any EVM-based blockchain, as well as plans to create flash loan apps for any other blockchain that supports smart contracts.
Benefits of Equalizer
- The platform supports cross-chain interaction with Ethereum, Binance, Polkadot, and Solana
- Low loan interest rates
- A one-of-a-kind incentive for liquidity providers
- The structure that is quick and extendable
- ERC20 coins are unlimited
- Integration philosophy that is friendly
- A distinct governing model.
Equalizer is a specialized flash loan marketplace that seeks to provide a better and more professional flash lending service than current DeFi alternatives. Because of its low and dynamic fees, a unique incentive scheme for liquidity providers, a fast and scalable infrastructure, an unlimited token range, an integration-friendly philosophy, a unique governance model, and multi-chain capability, the platform aims to become the market standard for Flash loans.
As a result, Equalizer is generating more than just a new product; it is also establishing a new niche/opportunity in the DeFi ecosystem.
Equalizer is a component of the DeFi ecosystem’s Layer 3 or the Protocol Layer.
It will work in tandem with other DeFi protocols, including decentralized exchanges, lending and borrowing protocols, asset management systems, and so on.
Equalizer may grow with personalized solutions at the neighboring levels since it is at the protocol level. Equalizer’s primary business, flash loans, may serve as a link between decentralized apps and crypto assets. We want to be the flash loan market maker and equalize the decentralized markets by providing a tailored solution for arbitrage, collateral swapping, liquidations, portfolio rebalancing, and a variety of other use cases.
Users make profits on the platform through the following forms:
This use case might be understood as a trading technique that takes advantage of market asset values. If the values of assets on different markets diverge, you may use a flash loan to acquire them for less and sell them for more on the other exchange.
Self-liquidations and liquidations
A person may flash borrow from one of the main platforms, pay back on the borrower’s behalf, release the deposit, exchange it for the token in which the flash loan is obtained, repay the flash loan, and get the bonus. The flash loan smart contract handles all of this effortlessly.
Exchange of collateral
This method allows a borrowed asset to replace a collateral position even if the borrower cannot repay the cash. Flash loans enable the liquidation of collateral positions with borrowed money and the establishment of a new collateral position with a different asset instantaneously.
Refinancing of loans
Suppose a user has a collateral debt position with a certain amount of loan taken out. In that case, he may flash borrow that amount, shut out the Vault, transfer the leftover money into Compound, and use Uniswap to swap them into DAI, which is used to repay the flash loan.
The goal behind this use case is to enable the immediate minting of an arbitrary quantity of assets, with the freshly minted assets existing just for one transaction and being burnt at the conclusion of the transaction cycle.
EQZ is the native token that governs the Equalizer platform. It is the ERC20 token that is utilized for platform governance. The platform’s total amount of tokens to be created is 100 million tokens. It will be allocated among the core team, advisers, early users, and early investors, with the remainder going into platform development. Since this token is not a financial asset, its primary function is fine-tune platform characteristics and react to the DeFi market’s development.
- Token name: Equalizer token
- Ticker: EQZ
- Blockchain: Ethereum
- Token Standard: ERC-20
- Contract address: updating
- Circulation supply: updating
- Total Supply: 100,000,000 EQZ
- Team: 20%
- Advisor: 3%
- Yield Farming (for Equalizer’s Vaults): 15%
- Liquidity Mining (for DEX’s Pools): 5%
- Ecosystem Development: 8%
- R&D: 5%
- Marketing: 7%
- TVL Rewards: 5%
- Seed Round: 5%
- Strategic Round: 10%
- Private Round: 12.5%
- Public Sale/ IDO: 1.5%
You can see the token allocation details in the following figure:
Equalizer platform will release one hundred million governance tokens. The management tokens will be awarded to the core team, advisers, early adopters, and early investors, with the remainder going toward platform development.
There are varying time periods for the transfer of rights depending on the kind of token holder. The Governance Token is not a financial asset; it is used to fine-tune the Equalizer platform’s settings and adapt to the evolving DeFi market. Each token represents one vote (but no voting obligation).
The governance model will be based on the instant governance model, which means that changes to protocol parameters will be implemented almost instantly rather than having to wait for lengthy voting periods, which is consistent with our overall emphasis on responsiveness and timeliness in all processes. Token holders will be able to choose a fine-tuned profitability model for each token’s vault depending on market evolutions, resulting in a dynamic goldilocks level that makes the vault lucrative at all times for both liquidity providers and arbitrageurs.
The following DAO-like voting mechanism enables this governance structure: any governance token holder may stake their tokens to vote, and the weight of each user’s vote is proportionate to the total amount of tokens staked. The weighted voting results are tabulated and applied on a daily basis.
Investors and partners
You won’t discover many Equalizer Finance reviews since this project’s plan starts in early 2021, and you can presently only test its mock-up. Nonetheless, the platform’s description, use cases, and features speak to its optimistic future and prospective investors’ interest.
This project is a DeFi solution with a primary loan product and a platform that maximizes cross-chain and multi-chain interoperability. At the same time, a team of skilled specialists is working on the project. Equalizer claims to provide users with a lot of value.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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