What is OnX Finance?
The decentralized finance (DeFi) space has seen tremendous growth over the past year, with projects such as Uniswap, Sushiswap, Aave, Curve, Compound, and Yearn leading the way. However, the OnX Finance team believes that there is still an important piece of the puzzle missing - a DeFi hub specifically for collateralized tokens.
Collateralized tokens include Liquidity Pool tokens, vault tokens, Liquid Staking tokens, Parachain Liquid Bonding tokens, and other reward-earning tokens. These tokens are backed by real assets, which makes them a safer investment option than non-collateralized tokens. However, there are currently no DeFi platforms that focus exclusively on collateralized tokens.
This is where OnX Finance comes in. The objective of OnX Finance is to enable DeFi users to easily benefit from yield farming opportunities by combining collateralized tokens, Farming, Staking, Lending, Stablecoins, and Yield Aggregators/Vaults. By doing so, OnX Finance aims to bridge the gap in the DeFi space and provide users with a more comprehensive and secure DeFi experience.
Staking Rewards and Liquid Staking
Proof-of-Stake protocols are an important part of the DeFi ecosystem, as they provide a more energy-efficient way of securing the network compared to Proof-of-Work protocols. However, staking also comes with a cost - capital inefficiency. When users stake their tokens to validate transactions and earn staking rewards, they are unable to use the value of their staked tokens.
Liquid Staking is the solution to the capital inefficiency problem of Proof-of-Stake protocols. By tokenizing the value of staked tokens, Liquid Staking enables users to benefit from enhanced financial flexibility. This includes increased liquidity, the ability to borrow against Liquid Staking tokens, composable passive income, simplified staking experience, trading opportunities, and the creation of stablecoins backed by Liquid Staking tokens.
Ankr, a strategic partner of OnX Finance, was the first company to enable Liquid Staking on staked ETH in December 2020. With Ankr's expertise and experience, OnX Finance aims to create products that leverage the benefits of Liquid Staking to enhance the DeFi experience for its users.
OnX Finance - Core Products
OnX Finance includes three core products:
- OnX Lending - allows users to collateralize Liquid staking tokens (e.g. ETH2 bonds) at fair value and borrow non-generating yield tokens (e.g. ETH).
- OnX Alpha Vaults - automates yield farming strategies and serves as a Yield Aggregator.
- onSable - composed of onEthereum (onETH), which is an ETH stablecoin based on ETH2 bonds, onStable token (onS), and the governance token of onStable.
OnX Finance is not just another yield aggregating platform or just another lending platform. The combination of vaults, lending, and stablecoins as an alternative and cheaper source of financing are the main ingredients for OnX Finance's future product development. The goal is to create yield-generating products that generate enhanced yield in a sustainable way using smart leverage, without leveraging market volatility of tokens including in a specific strategy.
Decentralized finance (DeFi) has been one of the fastest-growing sectors within the blockchain industry, with numerous projects emerging to provide users with financial services that are decentralized, transparent, and open to everyone. Ethereum, the second-largest cryptocurrency by market capitalization, has been the leading platform for DeFi projects, with many of the top DeFi platforms built on its blockchain.
Some of the most successful DeFi platforms on Ethereum include Uniswap, Sushiswap, Aave, Curve, Compound, and Yearn. These platforms offer a range of financial services, including decentralized exchanges, lending and borrowing protocols, yield aggregators, and more.
However, according to the OnX Finance team, there is still a critical piece missing in the DeFi ecosystem: a hub specifically for collateralized tokens. Collateralized tokens are tokens that are backed by other assets, such as liquidity pool tokens, vault tokens, liquid staking tokens, and other reward-earning tokens.
OnX Finance aims to fill this gap by creating a DeFi platform that enables users to benefit from yield farming opportunities combining collateralized tokens, farming, staking, lending, stablecoins, and yield aggregators/vaults.
One of the significant challenges with staking is that it requires users to lock up their tokens, making them illiquid and unusable. Liquid staking solves this problem by tokenizing the value of staked tokens, enabling users to benefit from increased liquidity, the ability to borrow against liquid staking tokens, composable passive income through yield farming, and more.
Ankr, one of OnX Finance's strategic partners, was the first company to enable liquid staking on staked ETH in December 2020. Ankr has been supporting the OnX Finance team with its knowledge and experience to create products that leverage the benefits of liquid staking.
OnX Finance's core products include OnX Lending, OnX Alpha Vaults, and onSable, which is composed of onEthereum (onETH), onStable token (onS), and the governance token of onStable.
OnX token (ONX) is the governance token of OnX Finance, excluding onStable. It is required to access future premium products, vote on OnX Finance's platform fee redistribution, and more. On the other hand, onStable token (ONS) is the governance token of onStable and is used as the medium of payment for paying minting/redeeming fees of onETH, incentivizing the usage of onETH, and more.
OnETH is an ETH stablecoin backed by ETH liquid staking tokens, and its main utility is to serve as an alternative source of financing to ETH for lending and liquidity pools. OnX Finance's product development strategy is to create yield-generating products that generate enhanced yield in a sustainable way using smart leverage, without leveraging market volatility of tokens including in a specific strategy.
In summary, OnX Finance aims to provide a DeFi hub specifically for collateralized tokens, enabling users to benefit from yield farming opportunities and enhanced financial flexibility through liquid staking, lending, stablecoins, and yield aggregators/vaults. With its strategic partnerships, knowledge, and experience, OnX Finance aims to become a leading platform in the DeFi ecosystem.
The investment information, comments, and recommendations provided here do not fall under the scope of investment consulting. Therefore, making an investment decision based solely on the information and comments provided here may not yield results that meet your expectations.
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