There are many reasons why blockchain is shaping the future of global financial markets. Blockchain technology solves the problem of high costs of financial clearing and settlement, inefficient cross-border payments, and insurance of financial assets. Thanks to distributed crypto finance, the efficiency of transactions has improved, ensuring that transaction costs and risks are reduced.
The blockchain also solves the problems of centralization in the storage and application of data, easy forgery and tampering, the inability to trace the source, the inability to share transactions, the high cost of transferring funds and reinforces trust between people. Therefore, the need for blockchain technology cannot be overstated.
Currently, there are many blockchain innovations across the Decentralized Finance (DeFi) ecosystem, including the Proxima Eco Chain, that are shaping the future of finance.
What is the Proxima ecological chain?
Proxima is a decentralized open lending platform built on the Ethereum network. The project supports the deposits, loans and lending activities of the traditional financial system in a distributed crypto economy. With its efficient and transparent algorithm structure, Proxima reasonably sets deposit and loan interest rates for lenders and borrowers.
The lending platform also supports traditional dark pool trading protocols such as Republicprotocol. Additionally, Proxima remains one of the few blockchain companies to have distributed crypto asset dark pool trading technology.
Proxima seeks to constantly improve its ecosystem to support the development of any private application, thus establishing a privacy-centric ecosystem of the distributed crypto financial market.
Characteristics of the Proxima ecosystem
Depository and loan company: Proxima has designed one of the best financial share certificates in the industry. The innovation allows users to receive pToken when they deposit the original currency at a price of 1: 1. Users must deposit assets supported by the Proxima agreement to get pToken. For example:
- Users get pETH when they deposit ETH in the Proxima deal
- Users get pUSDT when depositing USDT into the Proxima deal
- Users get the pDAI when they deposit the DAI in the Proxima agreement.
By guaranteeing pToken, users can borrow funds essential to the Proxima agreement.
Deposit Interest Rate Model: The interest rates of loans and deposits of lenders and borrowers are calculated using algorithms based on the borrowing volume and the trading volume of the platform. For the same interest rate on loans, the higher the rate of use of the funds of the lending platform, the higher the interest income on the loans and the higher the interest rate on the deposits. ; the lower the utilization rate, the lower the interest income on loans and the lower the interest rate on deposits.
Proxima uses Oracle oracles to ensure the price equity of guarantees. In addition, by referring to the deposit interest rates of other market platforms, we will make comprehensive adjustments to achieve more effective competitiveness in the market while ensuring the safety of the fund pool as much as possible.
Guarantee factor: The collateral coefficient refers to the maximum amount of assets that a user can borrow on the Proxima loan contract by staking a fixed amount of pToken. If the collateral coefficient of a certain pToken is 0, the collateral cannot be used to borrow from the Proxima agreement.
For each pToken of the Proxima loan contract, there will be a mortgage coefficient ranging from 0 to 1 depending on the liquidity of the collateral in the trading market and the results of the evaluation of market price fluctuations on several occasions. For example, assuming the collateral coefficient of the ETH digital currency is 0.9, this means that if a user has pledged 10,000 USD of pETH, they can borrow up to 9,000 USD from other funds on the Marlet.
Safety factor: Due to price fluctuations due to market volatility and fear of liquidation, Proxima uses a security factor H. This unique feature ensures the security of the borrower‘s account.
When the health factor (H) of the borrower’s account is less than 1, the conditions for liquidation of the Proxima contract will be triggered, and the collateral will be listed as an asset to be liquidated, which the liquidator will take care of. The liquidator will be rewarded for having carried out the liquidation.
Liquidation conditions: As a loan contract, the health of the platform system itself mainly depends on the ability of the Proxima loan contract to quickly perform liquidation operations on the borrower’s assets when the borrower’s collateral is insufficient. The liquidator will liquidate the pledged assets placed in the liquidation queue, and the liquidator will receive certain rewards through the liquidation.
Proxima uses Oracle from Oracle to determine the value of mortgage assets. For example, after calculation by Oracle, the value of the collateral is 10,000 USDT, then the liquidator only has to pay 9,500 USDT to take the collateral and get a liquidation reward of 5%. Upon completion of liquidation, ownership of the collateral by the borrower and the rights of the corresponding creditor will simultaneously be lost. The liquidator can be any user.
Best-in-class smart contract execution and cross-chain platform
Proxima adopts a decentralized multi-chain bridge structure. Compared to a single chain bridge, the multiple chain bridge separates the main structure of the oracle + consensus structure (for inter-chain behavior) from each target chain / starting chain, thus greatly reducing the complexity of the structure. The decentralization of oracles is also the main direction that Proxima is pursuing. In the collateral value assessment process, a mechanism for all nodes in the network to be controlled by consensus is established. It also covers the channels between several types of public chain assets and Ethereum.
The Proxima Eco Coin (PEC) token is the platform’s native cryptocurrency and can perform various tasks. It allows stakeholders to perform Proxima protocol upgrades securely. With the PEC token, Decentralized Autonomous Organizations (DAOs) can decide whether or not to add a new borrowing pool and change the relevant parameters of the agreement by voting. DAOs can also use the token to vote on spending from the Proxima lending platform’s ecological fund.
The protocol also plans to add more use cases to the PEC token in the future. For example, Proxima can help institutions open small, personalized cryptocurrency loans on its platform, and they will need to lock in PEC tokens in addition to pledged funds.
Token symbol: Proxima Eco Coin (PEC)
Token type / standard: ERC-20
Total initial supply: 6,980,000
10% to the PEC Foundation
5% to the development team
15% to community investment
70% dedicated to mining
Once the PEC is listed, the new token exit method is mainly achieved through mining. The method of extracting the output is primarily through the blockchain’s decentralized flow pool, which encourages decentralized investors to provide liquidity for the secondary market, and the newly produced PEC tokens are used as rewards.
The PEC team will also join other participants in the blockchain ecosystem to jointly promote the PEC ecosystem. Investors can obtain newly produced PEC tokens through irregular activities such as staking pledge mining. In addition, 20% of the profits from Proxima’s decentralized loan agreements will be used to redeem and burn PEC tokens.
Proxima aims to shape the future of finance. The protocol offers distributed financial solutions, multi-party authentication and improves industrial liquidity. Essentially, Proxima is a decentralized smart lending protocol that helps the development of financial markets with cross-chain technology solution, standard unification, value exchange, branding and community autonomy. through mortgages and digital asset replacement.
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