Commodo: A Seamless Borrowing and Lending Platform built on Comdex
Over the years, the cosmos ecosystem has reached and surpassed the reason it was designed, which was to provide an ecosystem of interoperable but autonomous blockchains that can exchange information and tokens between each other in a permissionless manner. With Cosmos technology one is assured of autonomy, sovereignty and scalability.
With the Cosmos "Internet of Blockchains,” there has now been well over 260 decentralized applications onto its blockchain. One of the reasons for this growth is that it has become easier to build on the Cosmos blockchain, thanks to last April’s upgrade called the Inter-Blockchain Communication (IBC) protocol which is also in tandem with the Cosmos Software Development Kit (SDK).
That being said, there’s a genuine need for DeFi instruments for mainstream users and in this regard DeFi instruments are few and far between.
The DeFi Ecosystem: Lending and Borrowing Platform
In the crypto space investors often invest with the intent of holding their assets for a long time in their wallets to accrue profits when prices go higher than the initial market price when they bought. However many question why they should keep crypto assets in their wallet when they can easily lend them to borrowers and earn more on interest involved with borrowing one’s cryptocurrency.
What this means is that lending and borrowing are vital elements to any flourishing DeFi ecosystem and hence a platform that enables lending and borrowing is needed on the Inter-Blockchain Communication protocol.
Currently, Comdex fills the gap in Cosmos ecosystem by developing a native IBC platform for lending/borrowing digital assets, and also provides sustainable yields for users.
To this end, the team has built Commodo, a decentralized and collateralized lending and borrowing platform in Cosmos. Below, we explore the features of this new Comdex Ecosystem product that improves the DeFi capabilities of Cosmos’ internet of blockchains.
What is Commodo?
Commodo is an IBC-native lending and borrowing platform in Comdex Ecosystem and uses the Lend module, which exists exclusively on the comdex-1 chain.
Its main goal is to provide a secure, liquid, and easy-to-use platform to provide passive income for IBC asset holders. In the future, Commodo will equally support the bridged assets of other ecosystems, synthetics assets, & other digital assets and allow them to be plugged into its earning mechanisms.
By interacting with the platform, depositors will be able to lend digital assets and receive yields on them. Conversely, borrowers will be able to borrow whitelisted assets by keeping their lent assets as collateral, subject to dynamic interest rates. The utilization of the assets determines these rates on the platform.
Is Commodo Decentralized?
Commodo is decentralized in nature as such users interacting with the platform will not be required to negotiate terms such as maturity, interest rate, or collateral with a peer or counterparty. Instead, all requirements will be directly handled by the modules of the Commodo platform.
The Commodo Platform and its usefulness
- First the Commodo platform is Interoperable with the entire Cosmos ecosystem.
- Capitalizing on arbitrage opportunities during times of high volatility.
- The Comdex network is known for its low transaction fees and near-instant transfers of value which is quite advantageous to lenders and borrowers.
- As a liquidity provider you can earn rewards for providing liquidity for IBC assets.
How to interact with the Commodo Platform
To interact with Commodo, users simply need to visit the platform once it launches, connect their wallets to the platform, and start depositing assets in the active pools. Once deposited, assets will provide sustainable yields to the lenders or help offset the interest rates if these assets are used as collateral for borrowing.
The funds are stored in a public, open-source module and formally verified and audited by a third-party auditor. More importantly, the platform will be audited by a world-class auditing firm, which will provide added trust for users in the platform. Funds remain accessible at all times, and users can withdraw them on demand.
Commodo’s Lending/Borrowing Mechanism
Comdex’s overcollateralized stablecoin $CMST and Cosmos’ $ATOM will serve as the two bridged assets. The $ATOM is chosen as one of the bridged assets to provide utility to $ATOM and for the further expansion of the Cosmos ecosystem.
Money markets could be created through governance using the assets that are whitelisted in the platform and provide liquidity for digital assets by pooling them with the preset bridged assets $CMST or $ATOM. This will allow the creation of money market modules such as OSMO-CMST-ATOM, CMDX-CMST-ATOM, BNB-CMST-ATOM, ETH-CMST-ATOM, etc.
The Commodo Platform and its Governance Token
The Commodo platform will be governed by $CMDX token holders & stakers. Holders will be able to put forth platform upgrades, directions, and development proposals through the governance interface.
Challenges faced by Lending and Borrowing DeFi Platforms
Some of the challenges faced by DeFi platforms which offers lenders and borrowing privileges include:
- Liquidity fragmentation is a major issue in the blockchain industry that is seen in an increasing number of different pools hence a need for liquidity concentration when bridging pairs.
- There is also the security problem of flaws of shared pools hence a need for all transactions to be routed through the same bridge asset which in this case will be Comdex’s overcollateralized stablecoin $CMST or $ATOM.
Comdex develops possible solutions for the decentralization of finance (DeFi) and the democratization of commodities by handing investors the knowledge of a widened scope of asset classes with rewarding features.
For more information and to stay connected with Comdex, you can use the links below: